A.M.BestTV: ‘First Monday’: Rising Drone Use Brings Risks Into View

OLDWICK, N.J.--()--In this first of five “First Monday” episodes, A.M. Best Assistant Vice President Henry Witmer explores the multitude of liability exposures brought by expanding commercial drone use and the underwriting challenges insurers face. Click on http://www.ambest.com/v.asp?v=fmdrones615 to view the entire video program.

The remaining “First Monday” episodes will focus on a look at insurance companies' social media strategies; year-end 2014 results of the U.S. life/health industry; an interview with Manuel Calderón, A.M. Best's new managing director in Mexico and the possible impact on disability insurers should a projected insolvency of the U.S. Social Security Disability Fund occur. “First Monday” is A.M. Best’s monthly program featuring commentary by the company's leading analysts.

Drones have the potential of changing business models over a number of industries, including insurance. Confronting insurers is how to cover the liability exposures brought on by these devices, and with the Federal Aviation Administration now in the process of developing regulations for the use of drones, insurers also are very much interested in how this industry will impact the market. Witmer addressed this issue.

“Liability exposure is going to far outweigh any kind of physical damage exposure to drones,” he said. “Two main areas that will generate liability exposures are operation and data security (the actual use of and why drones are being used).”

However, Witmer sees positive possibilities for the industry, but said caution will be needed. “To get involved in this industry, companies will have to think outside the box. Nevertheless, long term there exist some very strong benefits to using drones; although, the approach will have to be in a very careful systematic manner.”

Recent episodes of A.M.BestTV include:

  • Whale Phishing: Insurers Challenged by Digital Con Game: Christopher Giovino, director, forensic services, AON Global Risk Consulting, states insurers are rewriting crime policies in response to “whale phishing,” in which criminals fraudulently lure organizations into transferring money or surrendering important information: http://www.ambest.com/v.asp?v=phish515
  • A.M. Best Panel Updates Capital Model Developments: A recent webinar where two senior members of A.M. Best’s Rating Division provided updates on changes to the agency’s capital model, known as Best’s Capital Adequacy Ratio (BCAR): http://www.ambest.com/v.asp?v=capmodel515.
  • U.S. Wholesale Insurance Producers Flex Their Clout: Representatives from Lloyd’s and elsewhere said the American Association of Managing General Agents (AAMGA) members are major producers of business to the London-based insurance market. AAMGA leaders said they are bringing together insurance wholesalers in the United States and Canada: http://www.ambest.com/v.asp?v=aamga515.
  • NAIC CEO Ben Nelson: Don’t Just Add Capital, Look at the Risk: Ben Nelson, chief executive officer at the National Association of Insurance Commissioners (NAIC) and a former U.S. senator, states that U.S. regulators must convince international regulators that protecting policyholders takes a combination of capital and risk-based standards: http://www.ambest.com/v.asp?v=ebnelson515.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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Contacts

A.M. Best Company, Inc.
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com

Contacts

A.M. Best Company, Inc.
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
lee.mcdonald@ambest.com