Montreal-based Fluttrbox explain how they use drones to improve loss adjusting and reduce fraud in Property, Catastrophe and Motor insurance.
Let me start by defining what I do not mean by the term ‘drone”. Contrary to some reports in the media, a drone is not a nickname for a middle manager in the claims department! Nor is it a name for a short-range model airplane flown in a field on a Sunday morning by an enthusiast with a clear line of sight to the model.
What I mean by a drone is a remote controlled autonomous or semi-autonomous aircraft. Or, to be precise, an Unmanned Aerial Vehicle (UAV). These are lite-weight, vertical takeoff, helicopter-like flying machines controlled by GPS or software with a range of up to 200 miles.
The world-wide market for drones is growing at a pace. According to Business Insider earlier this year, “the market for commercial/civilian drones will grow at a compound annual growth rate of 19% between 2015 and 2020.”
And, in the 2015 market study by Teal Group, global production for Unmanned Aerial Vehicles will total $93bn in the next ten years!
The commercial application of drones spans many industries;
- Amazon and Google have well publicized plans to make commercial parcel deliveries using drones within a 30 mile radius
- Dublin fire brigade has announced plans to use drones by the end of the year to gather crucial intelligence on fires and other emergency situations.
- Journalists and the media are deploying drones to capture footage. Examples here include the BBC using a drone to film London’s new Crossrail project.
- BP has been developing drone technology since 2006 to perform tasks in some of the harshest areas of the world. Its drones can inspect a 3km section of pipeline in 30 mins when it would take a human 7 days to complete the same task.
And when you consider how these other industries are using drone technology, it is easy to see how insurance can benefit too when it comes to assessing both risk and claims.
Drones are a simple, flexible and low cost option to get at, and into, places that a mere mortal would struggle to do. And with the quality of 4k imagery hanging off a gimbal on the underside of a drone, this tech enables insurance carriers to do much more than they can today using conventional methods.
From underwriting through to claims, drone technology can improve the end-to-end insurance process.
Justin explained to me; “our goal at Fluttrbox is to give insurance firms the tools to get more information from, and about, their clients. When assessing a property risk, drones can provide detailed survey information of the outside of a large commercial property that would otherwise not be accessible.”
Founded in 2014 by Aristo Mohit-Coker, Fluttrbox provide drone services to property insurance carriers. Using drones to survey the outside of a building, Fluttrbox use the images and data collected by the drone to build detailed Maps. These models are uploaded to the underwriters and used for assessing and pricing the risk.
The traditional way of underwriting a property would have involved (the cost and time of) a manual inspection. And a reliance on documents such as out of date plans and historical structural surveys.
With Fluttrbox, the underwriters have an up to date and detailed model from which to assess the risk. And the beauty of this solution is that the data is accessible from wherever the underwriter is on whatever technology they want to use.
To paraphrase Francis Bacon’s well-known saying, if the mountain won’t come to Mohammad, he can send a drone!
And at policy renewal time, it is relatively low cost to repeat the survey and modeling process. Which means that now, in the policy data, there will be two maps to record of any changes or “wear and tear” to the property over the policy term.
Which is important should there be a claim.
Because, in the traditional model, a loss adjustor is going to get sent out to the property to assess any damage. And if the problem is with the roof and it’s a large structure, then they are likely to encounter difficulties making a full assessment or do so safely. With the Fluttrbox approach, there is no need for the loss adjuster to visit the property.
And in many cases, the claims processor will simply send in a contractor to fix the roof, totally reliant on the integrity of the contractor for a fair assessment and price.
With Fluttrbox, a drone is used to take detailed images of the damage. These are then modeled and uploaded to the adjustor to make their assessment, wherever the adjustor happens to be. And where Fluttrbox have been used in the underwriting process, the loss adjustor has an accurate like-for like model to compare the before and after effect of the damage.
It is easy to see that this approach will reduce cost, time and effort for the carrier. Especially when the damage is more than to a single property and over a large geographic area.
Weather is also a significant factor affecting property cover. Many parts of North America are prone to extreme weather conditions and the Canadian based team at Fluttrbox known this only too well! In places such as Florida, home cover is typically twice the national average. And in the aftermath of a severe storm, assessing property damage fully and in quick time is a real challenge for insurers using traditional methods.
So, what is Fluttrbox?
It is an online platform that operates an As a Service model where clients pay for the data they use. Insurance firms access the data they require from wherever they are, all date and time stamped, and with history of maps built up over time.
The platform uses propriety software to produce and display models in a Google maps-like format and has tools to allow the loss adjuster to drill into the model and measure the dimensions. The model can even be used to gather quotes for repairs without the time and cost of going to the site.
Fluttrbox have a “crowdsourced” a network of approved pilots across Canada and the United States.
They have built a trusted network of people with drones and the necessary approvals to fly for commercial work. As a job comes in from the insurer, Fluttrbox pushes the task to a local pilot, who completes the job and sends in the data to be modeled and processed by Fluttrbox. From there, it is available to the insurer to access from wherever the underwriter or loss adjuster happens to be without the dependence on them being physically present onsite.
Fluttrbox is about to start it’s first commercial pilot with an insurance carrier and it’s proposition is a simple one; this is more cost efficient and effective than sending underwriters or loss adjustors to the site.
For me, the value proposition of drone technology for an insurance carrier is clear and compelling. However, the biggest challenge I see is how they integrate this new information into their old world operations, processes and workflows. But then again, quite frankly, this is the single biggest issue for traditional insurers to overcome if they are to benefit from the advances and innovation of InsureTech.
Daily Fintech Advisers provide strategic consulting to organizations with business and investment interests in Fintech.