Drones and Insurance— still raising issues

As an insurer we have to be agile in our approach to new technology and adapt our products to emerging trends within the industry. As part of our series on the impact of autonomous technologies we will be looking at what it could mean for the transport industry.

I think we can all say that when, in 2013 Amazon CEO Jeff Bezos revealed his latest venture idea — Amazon Air — where packages were autonomously flown to customers within 30 minutes of ordering, we thought he was bonkers. Little did we know this would kick-start a number of companies worldwide into developing a technology which is now an important aspect in many people’s lives.

And that impact is enormously widespread.

Look at the internet and you’ll find countless companies providing drone services for a number of different industries. For example, there is a drone delivery system to ship blood/drugs to remote medical centres in Rwanda. The doctors make an order by text message then drones carrying the supplies are catapulted into the air, travelling at 80 mph and releasing their delivery when they reach the destination.

Drones are now commonplace, from surveying to moviemaking, but the big question is how they will integrate into our everyday lives. Could they be used to fly our shopping to us, or even fly us to where we want to go? Do you want your online purchases being dropped into your back garden where potentially someone could steal a delivery? Could this be fixed by having some sort of smart windows in our homes where the drone could be let in to drop the parcel off? On top of this, what happens if the drone is flying in adverse weather conditions? Nobody is really sure of the answers to any of these questions.

The manufacturers of drones say that the only way to make drones safe and to improve their reliability is to test them in public. However, the public are very wary of the effects of drones flying around, especially after the disruption recently caused at Gatwick and Heathrow airport. It was reported recently that Andy Sage, the lead expert on drones for the UK’s air traffic control, said parcel delivery trials will continue this year. He expects the trials to be on a very limited basis and build up over time.

One thing is for certain; drones will make our lives easier, but a lot of problem-solving is required before they could be used in our everyday lives.

So what do we need to consider from an insurers perspective?

• Theft — what happens if a drone/package is stolen?
• Third party liability — what happens if packages or drones fall out of the sky, either from malfunction or a mid-air collision of two drones, and hits someone/buildings?
• Distance — what distance could packages be delivered, would different lengths require different drone capabilities?

Ed Jones, Underwriting Assistant — Markel Marine, Cargo