Risk managers hesitant to give drones clearance for take-off
‘Invasion of privacy’ is the number one concern for risk managers when it comes to commercial drone deployment, says a Munich Re US survey.
Drones are on the up. They’re being deployed – or at least, trialled – by businesses around the world, in a wide variety of applications. Drones are beginning to deliver online orders, check crops for pest damage, protect warehouses stuffed with inventory from thieves and inspect built infrastructure such as roads, railways and bridges to see if repairs are needed.
But the commercial use of drones doesn’t come without risks or liability, as a new survey released last week by Munich Reinsurance America highlights. The reinsurance specialist, also known as Munich Re US, spoke to 100 US-based corporate risk managers to see what concerns they might have about their own organisations deploying drones in the near future.
More than six out of ten (61 percent) are concerned about the potential for their organisations’ drones to invade someone’s privacy. Presumably, this could leave them open to legal action and reputational damage. Other concerns include inadequate insurance (cited by 15 percent); personal injury (15 percent); and property damage (9 percent).
Back in August 2016, the Federal Aviation Administration (FAA) issued operational rules that allow for commercial use of drones in US airspace for operators who complete a certification process.
The FAA anticipates that shipments of commercial drones will reach 2.7 million by 2020, compared to just 600,000 in 2016.
Risk managers, according to Munich Re US, broadly agree that take-off is inevitable. Sixty-two percent of respondents expect commercial drone usage to become “common practice” within the next five years – a big jump from the 37 percent who believed this in a previous 2015 Munich Re US survey.
Forty-six percent, meanwhile, say they would consider or explore the use of drones within their own business – although only 7 percent say their organisation is already using drones to conduct business.
Naturally, that’s good news for Munich Re US, which launched a new drone insurance product in July this year. As Gerry Finley, senior vice president of casualty underwriting at the company, puts it: “As the use of drone technology continues to evolve, the insurance industry will need to be prepared with innovative products and services to help its customers understand and manage the emerging property and liability risks involved.”
Other US insurance companies offering coverage for commercial drone use include AIG US, Avion Insurance and Travers & Associates.
Two weeks to go: On 26 & 27 September 2017, Internet of Business will be holding its Internet of Insurance USA event in Austin, Texas. This event will focus on how insurance carriers can capitalize on IoT.
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