OLDWICK, N.J.--(BUSINESS WIRE)--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.”
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