Just as Amazon's drone delivery service is transforming retail, drones are making inroads in the insurance industry.
Allstate is using drones to assess damage property damage in Texas, Oklahoma, New Mexico and Colorado, particularly on rooftops -- radically cutting the amount of time the process takes.
"What's amazing is, if you consider the pure drive time of an adjuster taking the picture [on the rooftop] and getting back in the truck and going to the next location, we're doing two or three locations a day, and with a drone we're doing eight or nine or possibly more," said Allstate spokesman Justin Herndon. Allstate is the second-largest property and casualty insurer in the U.S.
Allstate used drones to inspect rooftops of homes damaged by Hurricane Matthew last fall in Georgia and South Carolina. The company said drones cut down the time it took to inspect rooftops, and the pictures they took were high quality 4K-resolution images.
"The images are better than what many people see on television, and you can zoom into a single shingle on the roof," Herndon said.
Drones are used during a claims process after the first notice of loss, according to Allstate. After the customer gives the green light to have a drone used, the company calls a vendor that deploys the drone. The vendor then sends the image back to Allstate almost instantaneously, at which point Allstate makes a settlement offer. The company has been testing the technology for a couple of years, which as of this spring had moved beyond the testing phase. Allstate plans to expand the use of the technology to other parts of the country.
Around 20 percent of property and casualty insurance companies are currently using drones, a percentage that could double next year, according to Novarica. The uptick in the number of insurers using drones is partly the result of a Federal Aviation Administration ruling last June that set guidelines on drone use by businesses, including the requirement for the drone operators to have passed a drone-piloting exam, along with the need for a visual line of sight between the operator and the drone. Insurance companies may still need to send a person to assess areas the drone is unable to reach.
Allstate is partnering with a startup, Eagleview, to carry out the drone inspections of rooftops. Other startups operating in the field such as Fluttrbox are working with insurers to conduct on-demand inspections of commercial properties by drone.
"It gives consistency for the insurer -- it gives them better quality imagery and consistency at a lower price point, " said Fluttrbox founder and CEO Aristo Mohit-Coker.
A drone can be used to analyze a rooftop at any point of an insurance company's evaluation process, either after a claim has been filed or to assess risk beforehand. Analysts note that drones can assess properties that would otherwise be difficult to reach.
"They could be not very easily-accessible buildings where they don't have a lot of information about the construction, or they're in remote areas, or they're buildings that are older or are considered risky," said Jeff Goldberg, svp of research and consulting at Novarica.
Despite the advantages of drone technology, Goldberg said insurance companies must find ways to safeguard the privacy of individuals, especially given that privacy laws vary by state. Ensuring that the public is informed about how drone-delivered property assessments will work should also be a priority.
"Do you want to be known as the insurance company that's known to be spying on people? Public perception is just important as the law."