The aviation insurance industry in the United States consists of roughly around 12 insurance providers and as such, the drone insurance rates they offer all tend to follow one another closely.
If one particular event causes the market to harden or soften, it’s rare that the industry as a whole isn’t all impacted. Now, as it pertains to COVID-19 and drone insurance, there is one particular trend that I think could cause a ripple in the market down the road.
Automated Drones Can Monitor COVID-19 Compliance
COVID-19 has brought about many surprises that we simply would have never seen coming prior to the pandemic. First of all, the toilet paper shortage in America caught us all off-guard.
However, one of the more troubling surprises is just how divided Americans have become around the virus and how it should be battled. So when a local California start up announced that they’ve created software that would allow drones to monitor social distancing and even whether or not a person was wearing a mask, the world took notice.
The company states that no personal data is saved and that it doesn’t utilize facial recognition technology, but that didn’t appease civil liberties advocates. At the end of the day, it seems to push us one step closer to the day where robots monitor human behavior.
Enhanced human monitoring is one thing, but the exponential use of drones in everything from delivery to now COVID-19 compliance monitoring will increase the volume and frequency of drone operation throughout the country. Typically whenever there is a significant increase in initial exposure with so many new technologies and innovation, losses spike as the bugs and kinks are worked out.
Increased Losses Drives up Drone Insurance Rates
The company that created the social distancing software had already created drones that could hunt down and capture other drones. Meaning, they saw a market developing for the acquisition and destruction of drones. Amazon continues to dream of the day when packages can be delivered via drones. All of this innovation with invariable lead to a better quality of life and offers a huge potential to the drone industry but also inevitable will lead to increased losses. Increased losses will always drive up insurance rates in any market.
The Future of Drone Insurance
Personally, I think we are basically in the Ford Model-T era of drones. Meaning, the industry is just getting started. The rapid expansion fo the drone industry which we are now witnessing will lead to a spike in losses which will have a direct effect on the drone insurance market.
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