The importance of drones and aerial imagery rose to a new level in the wake of 2018 natural catastrophes as insurers made them an integral part of their disaster recovery procedures, particularly following the hurricanes in the Southeast.
From the images of Hurricane Florence’s floods across North and South Carolina to Hurricane Michael’s devastation in the Florida Panhandle, insurers were able to see the impact immediately and get straight to work handling claims for their customers, and gather data from the events from aerial images.
“[In 2018] instead of being an experiment, it was really a bigger part of their tool set,” said Cory Shelton, head of UAV Operations and Technologies for Geomni, a Verisk business. “They had an opportunity to vet and work with the data [in 2017] and realized ‘this is a critical part of our workflow now’ – that’s the biggest shift that’s occurred.”
Geomni saw increased use of drones for post-catastrophe inspections compared with last year because of Hurricanes Florence and Michael in the Southeast and the wildfires in the West.
“Usually what we find is we have carriers that are very anxious to get airplane imagery right after a catastrophe … They want that data as fast as possible,” said Shelton. “This was the first year that we started getting requests from insurance carriers to have drone inspections executed shortly thereafter [the events] as well. Usually they’re more hesitant and they’re of the opinion, ‘Okay, we can wait this out, we’ll send drones if we need them.'”
The company, formed five years ago as a spin-off of claims estimating software company Xactimate, currently works with four of the top 10 insurers in the country while nine of the top 10 work with its sister company Xactimate, according to Shelton. He said in the five years since Geomni started, the use of aerial imagery and drone technology by insurers has been growing fast, particularly for claims, but 2018 was a turning point.
“Every single partner that we have, or even partners that we don’t have and we’ve just been in discussions with, are in one way either exploring a drone program or trying to fit it into their workflow,” Shelton said.
Geomni focuses on geospatial operations, specifically airplanes, satellites, drones and gathering data. It currently has 12 operational hubs with airplanes and other remote sensing devices used to gather data. Shelton said the company has its own fleet of airplanes, as well as drones and drone technology and tools that are used to support insurance carriers that also deploy their own drones.
Shelton said after insurers had an opportunity to vet drone services and use drones in their workflows for storms like Harvey and Maria in 2017, they were anxious to deploy them after this year’s catastrophes to view overall damage to their books as well as start claims inspections for policyholders. Shelton said some carriers were even impatient about getting drone teams out to inspect damage right away.
“That was a big shift from  to ,” Shelton said.
Shelton said because of the scale of the Hurricane Florence, which was primarily a flood event, Geomni relied more on aircrafts to gather data and received many more requests from insurers for that data than for drones.
“It’s because of the scale of the disaster and that’s where airplanes shine,” he said. “You just don’t have the ability to gather as much data with drones as you do in airplanes.”
Still, the use of drones after Hurricane Florence was “incredibly prevalent,” according to Irina Denisenko, vice president and general manager of drone technology provider PrecisionHawk’s pilot network of 15,000 commercially licensed drone pilots called Droners.io.
PrecisionHawk announced a partnership with EagleView, which provides high-resolution aerial imagery, property data analytics and structural measurements to the insurance industry, shortly before Hurricane Florence made landfall on Sept. 14. Through the partnership, EagleView collects insurance claims imagery using drones piloted by PrecisionHawk’s network and the drone operators can use EagleView’s claims technology for remote claims inspections.
PrecisionHawk had about 40 drone pilots actively working on claims inspections in the wake of Hurricane Florence and worked with about 20 or so carriers in the area of the storm.
“We saw the first big usage of drones in a post-storm situation [in 2017] between the hurricanes in Florida and Houston [Irma and Maria], because so many places were unreachable,” she said. “It was more coordinated this time around and we were on top of it and were able to get ahead of it, so it was a smooth integration.”
Tim Frank, vice president of marketing for NearMap, a global location content provider that specializes in high-resolution aerial maps provided through a cloud-based service, said its post-hurricane coverage for Florence covered more than 4,500 square kilometers – from Newport, N.C., down to Myrtle Beach, S.C. – over a 28-day period, partly because the storm slowed quickly but went on for many days. The flooding from Hurricane Florence also made it difficult
During Hurricane Michael, which was a more intense and rapidly-developing storm, the company captured 1,380 sq.km. of images over the course of nine days. All images Nearmap collects are “stitched” together to create one seamless map that can be uploaded and used by businesses including insurance companies.
The use of Nearmap’s imagery of the impacted hurricane areas increased by eight times between mid-August and mid-October 2018 compared with the same period in 2017.
“Any time there is an event like this, we definitely see an increase in activity,” Frank said. “We’re growing very, very rapidly. The adoption of location content and location intelligence is becoming very critical, because it automates much of the manual work.”
Nearmap’s aircrafts regularly fly over the 430 largest urbanized areas in the U.S., representing 70 percent of the population, up to three times a year, according to Frank. During disasters – like Hurricanes Michael and Florence – the aircrafts again fly over the affected regions so that insurers have access to both before and after images from its camera systems affixed to the aircrafts.
“That data becomes very useful because you have both before captures, as well as captures that happen after those types of events. It’s very helpful in terms of validating damage claims,” he said.
While many insurers are contracting out drone and aerial imagery services, a growing number are developing and utilizing their own technology. State Farm, which was the first insurer in the U.S. to receive permission from the Federal Aviation Administration to operate unmanned aircrafts for commercial use back in 2015, has been actively using drones for aerial roof inspections since August 2016.
In September, it was the first insurer granted a waiver by the FAA to inspect damage caused by Hurricane Florence. It then used drone technology to assess widespread damage, as well as for individual aerial roof inspections of customers’ homes and property from Hurricane Michael after receiving an additional waiver for operations related to that storm.
Jeremy Carnahan, a data analyst at State Farm’s RedLabs Department, the innovation area at State Farm focusing on new and emerging technology, said State Farm having its own in-house drone technology operation helps its customers and gives the insurer better and quicker access for inspections.
“With the damage assessment piece for Florence and Michael, being able to go in once the storm has cleared and gather a wide range of footage of the damage is very helpful in determining the damage allocation and where to deploy resources,” he said.
Before sending drones out for individual claims after a disaster, Carnahan said State Farm first evaluates each claim to see if using a drone makes sense. But being able to survey the area and the damage provides a better perspective than from the ground for its overall response efforts.
“It allows us the insight of how we can access the areas that are heavily damaged,” he said.
The last two years suggest that drones and aerial-imagery will soon become commonplace after catastrophes, as well is in other areas for the insurance industry.
“The potential is hard to even grasp – there are so many avenues to potentially look at. We will definitely be seeing more use and harnessing the power of aerial imagery, and drones in particular,” said Carnahan.
Frank said as aerial imagery capture technology and services continue to increase and improve, he expects the insurance industry will begin to employ it in more areas of their business.
“One of the big trends that we see becoming more prevalent in the future is the use of high-resolution aerial imagery to power machine learning that can then extract very important features from it. Not just related to damage, [but on] specific features on homes or on land – and that’ll be important,” he said. “It could be things such as flood plains; it could be things such as the type of roof material; it could be things such as water outlets that are close to specific areas that could represent flooding problems.”
While aerial imagery and drone use have exploded on the claims side, on the underwriting side the adoption rate has been a “bit slower,” said Shelton.
And even with the fast-adapting technology, the use of drones and aerial imagery is not the only tool insurers use for inspecting claims.
“We still do have to have a person physically on site [to inspect claims], so if flooding prohibits our access, sometimes that causes a delay. And that was one of the big challenges we faced with Florence was the weeks of flooding after the event,” Shelton said.
The challenge for insurance companies right now, he said, is integrating the use of drones with the processes they already have in place.
“[Insurers] all want to embrace it, but they’re looking for the technologies to bridge the gap between a flying camera, which is what a drone is, and a tool that’s really going to help them integrate it directly into their workflows as part of the claims settlement process. So that’s one challenge towards getting to that 100 percent or 90 percent adoption and acceptance,” he said.
There are also plenty of carriers that are not comfortable settling a claim from imagery without having a human inspection.
“That’s a big challenge and I think that’s going to require some time and it may require judicial precedents in order for that to actually occur,” Shelton said. “Of all the partners we work with, only two of them have actually been willing to deny a claim based off of drone imagery.”
Denisenko said even though the number of claims being inspected with drones is up from two years ago, the majority of claims still do not rely on drones or aerial imagery.
“It’s still early in the market so I wouldn’t be surprised if it’s less than 50 percent or so. It’s been a low market penetration … it takes time,” she said.
For those insurers that are embracing the technology, particularly after large-scale disasters, Shelton said its not because they’re just trying to defend their bottom line.
“They came to us because they said, ‘Our policyholders are hurting and we really can make a difference in their lives by utilizing new technology.’ And I think that that’s a really great attitude for the industry as a whole,” said Shelton.
State Farm says it will continue to apply new technology where it makes sense for customers.
“We are making sure we are being innovative and utilizing all the tools available to make sure we help our customers recover as quickly as possible,” said Angie Harrier, State Farm spokesperson.
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