With Hurricane Harvey heading toward the Texas coast, insurers plan on leveraging drones and digital channels to address an expected barrage of claims beyond this weekend. It's likely to be a major test of the increasing amount of investment insurers have made in the technology, as well as partnerships with drone service providers, over the past several years.
San Antonio-based USAA is preparing to send out unmanned aerial vehicle systems after the hurricane, operated by a network of pilots available to USAA on demand.
“We have a fleet of drones ready to deploy to aide in assessing any damage as a result of Hurricane Harvey," says Rebekah Nelson, a company spokesperson.
USAA has a drone-as-a-service partnership in place that allows the company to get adjusters out to homes fast. With much of USAA's drone infrastructure set up in Texas, the insurer should be able to leverage the technology easily for this storm.
The insurer declined to name its partner, but Kristina Tomasetti, strategic innovation director for the company, told Digital Insurance earlier this year that the reason for joining with an external firm was that the company "wanted the greatest possible flexibility to determine what works best, which may be different in San Antonio than in Colorado."
Other insures have entered similar partnerships. Farmers recently announced an agreement with Kespry, which will provide the insurer with hardware, software and analytics around drones. Allstate has signed on with EagleView Technologies, and Texas is one of four states where the company has drone operations ready to go. In fact, Allstate has already been settling claims in the state using drones, according to spokesperson Justin Herndon.
“That will continue in earnest after the storm is over, assuming the conditions are right for the use of drones,” says Herndon, adding the insurer has "hundreds of personnel" standing by in Dallas waiting to inspect affected areas.
Demonstrating the value
Though many major P&C insurers have drone programs in place, the insurers that are lagging behind are likely to see the benefits of investing in the technology as their peers respond to the storm.
“With the probable prolonged access to damaged areas, drones and geospatial technologies will be critical to getting a jump on claims and damage,” said Karen Pauli, principal at Strategy Meets Action.
Depending on how far along insurers’ drone and geo-mapping pilots are, companies could put proof-of-concepts to the test, Pauli added. For some, a lack of confidence in ongoing pilots hint this storm would not be a good time to experiment further. Insurers that have just been thinking about the technologies–and still don’t have them–will regret the delay, she said.
Finally, the digital communication insurers have with customers in the aftermath of Harvey is just as important as the technologies carriers will use, Pauli says. As an example, she notes insurers should make short-term living expenses available to customers digitally, especially at a time when most won’t have access to paper checks.
In fact, USAA also expects more claims to be filed digitally in the wake of the storm, Nelson says. Normally, call centers are flooded with calls from members, but the insurer is encouraging customers to go first to its website or mobile app rather than dialing up call centers.
More than 230,000 homes along the Texas Gulf Coast are at risk when Harvey hits as a Category 4 storm Friday, Bloomberg reports. Total reconstruction costs are anticipated at nearly $40 billion, with the Houston area likely to be most affected. The storm will be the first to hit Texas since Hurricane Ike in 2008, which caused just under $30 billion worth of damage.
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