Published: 04 December 2017
Around the world, it is estimated that about 1.5 million drones, or unmanned aerial vehicles (UAVs) - excluding those used for military purposes - are already airborne with that number expected to triple by 2020. The biggest growth will be in commercial applications of drones, which a recent PWC report, Clarity from Above, predicted will grow in value from $2bn in 2016 to $127bn by 2020.
The risks posed by drones range from the loss of the UAV itself and any equipment it is carrying, to damage to property and bodily injury, as well as breach of privacy and the potential for catastrophic loss if it strays into controlled airspace and hits a plane or a helicopter. There have been very few insured claims so insurers have little to go on when it comes to rating drone risks, although some insurers such as Global Aerospace and Kiln have been in the market for several years.
With the rapid growth in the leisure and commercial use of drones, many insurers are now being asked to cover drones through both household and commercial policies. This would require an extension of the basic cover as aviation is a standard exclusion and most insurers are looking to specialists in aviation risks to provide the cover. For the larger insurers this could be an existing internal expertise, otherwise it is most likely to be provided in partnership with specialist underwriters or managing general agents.
Given the predicted upsurge in drone ownership and usage over the next few years, how well equipped is the UK insurance market to seize the opportunities presented, whilst combatting the various challenges?
To find out, Post in conjunction with lawyers Kennedys surveyed the UK insurance market to uncover what insurance professionals think about the future of drone insurance and what role the industry can play in shaping the regulatory regime.
This whitepaper sheds light on the key findings from the research.
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