By: Miranda Tshuma
At a time when many insurers have been badly hit by the pandemic, technology has the potential to bring operational savings for insurers
The pandemic has grabbed the Insurance industry of South Africa’s complete attention. It has claimed the lives of millions of people while bringing the global economy to a halt, but just because there is a pandemic that does not mean that we get to take a break from other perils and life in general.
Drones are increasingly aiding many aspects of our lives. The claims process is a highly complex process involving a lot of processes like administering existing claims, selling new business, renewing policies and processing claims.
Limiting human contact – In a novel coronavirus world, the benefits of using drones is being highlighted even further. Physical assessments are hampered by social distancing and isolation guidelines. Drones make it possible to keep human contact to a minimum which according to Covid regulations is not only important but has become strictly necessary. Contactless inspections ensure minimal exposure to the insured and the assessor in the claims process.
United States has already started using drones when it comes to assessing damage. According to the Modern Insurance Magazine (2020), early in March, a devastating tornado ripped through Tennesse resulting in a number of deaths and over USD90 million worth of damage. To assess the damage, drones where deployed to inspect the large-scale are as most structures. The building where also not structurally safe for assessors to go in and inspect personally.
In South Africa, Old Mutual iWyze has passed the operational audit and demonstration flights required by the South African CAA. It is currently in the process of obtaining its remotely piloted aircraft licence. Once completed, drones will be used in assessing car accidents and claims stated the Executive head of Hippo.co.za. This is good news for the claims process as it will make it easier to assess and also deter and detect fraud and in turn protecting the assessors from Covid.
Drones can help detect and deter insurance fraud – According to crime stats from 2018/19 released by the South African Police Service and Stats SA, commercial crime has seen an increase of 14.4%. 32% of all insurance claims submitted in any year could be fraudulent reported Moonstone (2019). Fraud affects both insurers and the premium paying customers as they carry the cost of ever rising premiums. With income affected with by the pandemic, this will scare the clients away. So insurers should manage fraud now more than ever to avoid the cost of fraud being assured by the client. Drones is the future of managing fraud.
A LIMRA research suggested that the struggles and challenges that the pandemic has presented to people during the pandemic present a gap that people fraudsters will take advantage of because the pandemic is a new phenomenon that no one was expecting and looking forward to. With so many people laid off from work opportunistic fraud will increase.
Insurance fraud can be limited if drones are deployed. At the moment of First Notice of Loss, a drone can be deployed to inspect the claims site, increasing information capture accuracy and timeliness. For example insurers will be able to capture aerial images of properties when policies are taken out and these can be compared to drone images when damage has occurred.
The Claims Journal report, 2019 reported that some insurers in USA using drones have reported shorter claim times and improved customer services. Short claim times ensure client satisfaction and at the end of the day good referrals due to good service.
Data collection and analysis – It also has to be noted that drones can not only be used for assessing damage but also to collect data and analysis. Although most of us don’t think about the roofs over our heads at the office or home, insurer view roofs as a crucial element when evaluation a risk in property insurance. Flawed and deteriorating roofs can lead to more damage and thus more claims. Drones will make is easy for insurers to be able to assess before incepting a policy especially the ones incepted during the pandemic period since social distancing has to be adhered to.
According to Global Data report for 2020, Covid-19 is set to accelerate the use of drones among insurers around the world. Therefore insurers in South Africa should get with the programme of drones as it’s the future and it is better for them to be part of the future.
Covid-19 is a wake-up call that creates opportunity. The report describes the pandemic as the wake-up call the insurance industry needed and needs. Now the opportunity is there for those who can gain value from it for their organisation.
Therefore insurers must grab the use of technology as it will change the game of claims as it’s the future.