Drone insurance market to take off
More than 2.5 million drones – or unmanned aircraft systems (UAS) – will be in the skies above America within three months; more than 600,000 of these will be for commercial use.
That is the forecast of the US Federal Aviation Administration (FAA), which predicts the market for commercial application of UAS will soar from $2bn to $127bn by 2020.
In the face of this burgeoning industry, Allianz believes the drone insurance market could mushroom to $1bn. It explains that while drones can deliver problem-solving technologies across numerous industries they also bring with them a number of new safety concerns, ranging from collisions and crashes to cyber-attacks and terrorism. It says that to ensure safe UAS operations, systematic registration of unmanned aircraft and robust education and training of operators is necessary.
‘There have already been enough incidents and near-misses to date involving UAS to generate concern that the likelihood of collisions and other loss events will grow as numbers multiply,’ said James Van Meter, an aviation practice leader at Allianz. ‘In many locations, there are few or no pilot training and maintenance standards. In addition to regulation, education will continue to be key to ensuring safe UAS operations.’
Emerging uses include delivering blood and vaccines to remote locations in Africa, fighting grass fires, pest control and even delivering pizza and coffee. Allianz supports a pilot-to-business marketplace, FairFleet, which links pilots with businesses in need of UAS, offering insurance coverage and claims settlement services.
James concluded, ‘Whether you run a coffee shop or a truck delivery business you need insurance to run your business. Drones are no different. Commercial operators of UAS will require at least $1m of insurance coverage to protect against risk exposures.’
If growth patterns continue as predicted, the global value of drone insurance could approach $1bn.