Insurance Industry

Insurers Flying High

Four insurance companies have received approval to use drones for claims and risk management purposes.
By: | April 16, 2015 • 3 min read

Four insurers are among 125-some pioneering companies to receive approval from the Federal Aviation Administration to test drones for various commercial purposes in the U.S.

The FAA agreed to allow the insurers to test the use of unmanned aerial vehicles (UAVs) to survey everything from damaged roofs and flooded areas to tornadoes, hurricanes and other natural disasters.

Advertisement




The insurers are American International Group Inc. (AIG), Erie Insurance Group, State Farm Mutual Automotive Insurance Co., and United Services Automobile Association (USAA).

In March, State Farm became the first insurer to receive FAA approval to test drones for commercial use. State Farm plans to explore the use of UAVs in assessing potential roof damage during the claims process and in responding to natural disasters.

“The potential use of unmanned aerial systems provides us one more innovative tool to help State Farm customers recover from the unexpected as quickly and efficiently as possible,” said Wensley Herbert, operations vice president-claims.

At AIG, the company received FAA approval to use UAVs to conduct inspections for risk assessment, risk management, loss control and surety for its customers.

Insurers granted exemptions to use drones are American International Group Inc. (AIG), Erie Insurance Group, State Farm Mutual Automotive Insurance Co., and United Services Automobile Association (USAA).

The exemption also permits AIG to implement a robust research and development program to explore new and innovative ways to employ UAVs.

UAVs can help accelerate surveys of disaster areas with high resolution images for faster claims handling, risk assessment and payments, according to the company. The drones can also quickly and safely reach areas that could be dangerous or inaccessible for manual inspection, and they provide richer information about properties, structures and claims events.

“AIG is committed to continuous improvement and innovation to providing better, faster and safer risk and claims assessments to our customers,” said Eric Martinez, executive vice president, claims and operations. “Leveraging cutting edge technologies like UAVs can enhance our ability to assess and mitigate risks to better help our customers and their communities prepare for and rebuild after a catastrophic event.”

AIG has already established an international UAV research and development center and conducted flights in New Zealand. These flights have provided valuable insights on technology, flight operations, and image collection technology, flight and image collection techniques that will be incorporated into AIG’s global UAV strategy, the company said.

Advertisement




USAA said drones could help speed review of insurance claims from its members following natural disasters.

In October 2014, USAA filed for an exemption under Section 333 of the FAA Modernization and Reform Act of 2012 to enable more efficient testing of small drones. Exempt from select FAA regulations, USAA can now fly drones during the day within line-of-sight of a trained pilot and air crew. Prior to the approval, USAA test flights could only take place at FAA-approved sites.

USAA said drones could help speed review of insurance claims from its members following natural disasters.

Currently no aircraft is allowed to exceed an altitude of 400 feet, and all flights must continue to be reported to the FAA.

With FAA approval, USAA will work to efficiently research and develop best practices, safety, and privacy protocols and procedures as it further develops plans for operational use, according to the company.

USAA received a second exemption in early April that will allow the insurer to go operational in a catastrophic situation.

“We’re proud to be among the first insurers approved for this technology,” said Alan Krapf, president, USAA Property and Casualty Insurance Group. “It’s our responsibility to explore every option to improve our members’ experience.”

The USAA family of companies provides insurance, banking, investments and retirement products to 10.7 million current and former members of the U.S. military and their families.

A spokesperson for Erie insurance Group said the company believed drones, which they refer to as unmanned aerial systems (UAS), will play a major role in the future of insurance innovation and help the company be safer and more efficient in its claims handling and risk assessment.

“For example,” the spokesperson said, “if we need to assess a roof on a large building or one that has an especially steep pitch, we can now test the viability of using UASs instead of sending someone up on a ladder.

Advertisement




“We hope to eventually be able to use UASs to assess damage after catastrophic weather events when physical structures can be especially precarious.”

Commercial drone flights are generally banned in the U.S. However, the FAA has awarded some exemptions for commercial drone use under a program created by Congress to allow flights while the agency completes more formal regulations.

Steve Yahn was a freelance writer based in New York. He had more than 40 years of financial reporting and editing experience. Comments can be directed to [email protected]

More from Risk & Insurance

More from Risk & Insurance

2017 Teddy Awards

The Era of Engagement

The very best workers’ compensation programs are the ones where workers aren’t just the subject of the program, they’re a part of it.
By: | November 1, 2017 • 5 min read

Employee engagement, employee advocacy, employee participation — these are common threads running through the programs we honor this year in the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, sponsored by PMA Companies.

A panel of judges — including workers’ comp executives who actively engage their own employees — selected this year’s winners on the basis of performance, sustainability, innovation and teamwork. The winners hail from different industries and regions, but all make people part of the solution to unique challenges.

Advertisement




Valley Health System is all-too keenly aware of the risk of violence in health care settings, running the gamut from disruptive patients to grieving, overwrought family members to mentally unstable active shooters.

Valley Health employs a proactive and comprehensive plan to respond to violent scenarios, involving its Code Atlas Team — 50 members of the clinical staff and security departments who undergo specialized training. Valley Health drills regularly, including intense annual active shooter drills that involve participation from local law enforcement.

The drills are unnerving for many, but the program is making a difference — the health system cut its workplace violence injuries in half in the course of just one year.

“We’re looking at patient safety and employee safety like never before,” said Barbara Schultz, director of employee health and wellness.

At Rochester Regional Health’s five hospitals and six long-term care facilities, a key loss driver was slips and falls. The system’s mandatory safety shoe program saw only moderate take-up, but the reason wasn’t clear.

Rather than force managers to write up non-compliant employees, senior manager of workers’ compensation and employee safety Monica Manske got proactive, using a survey as well as one-on-one communication to suss out the obstacles. After making changes based on the feedback, shoe compliance shot up from 35 percent to 85 percent, contributing to a 42 percent reduction in lost-time claims and a 46 percent reduction in injuries.

For the shoe program, as well as every RRH safety initiative, Manske’s team takes the same approach: engaging employees to teach and encourage safe behaviors rather than punishing them for lapses.

For some of this year’s Teddy winners, success was born of the company’s willingness to make dramatic program changes.

Advertisement




Delta Air Lines made two ambitious program changes since 2013. First it adopted an employee advocacy model for its disability and leave of absence programs. After tasting success, the company transitioned all lines including workers’ compensation to an integrated absence management program bundled under a single TPA.

While skeptics assume “employee advocacy” means more claims and higher costs, Delta answers with a reality that’s quite the opposite. A year after the transition, Delta reduced open claims from 3,479 to 1,367, with its total incurred amount decreased by $50.1 million — head and shoulders above its projected goals.

For the Massachusetts Port Authority, change meant ending the era of having a self-administered program and partnering with a TPA. It also meant switching from a guaranteed cost program to a self-insured program for a significant segment of its workforce.

Massport’s results make a great argument for embracing change: The organization saved $21 million over the past six years. Freeing up resources allowed Massport to increase focus on safety as well as medical management and chopped its medical costs per claim in half — even while allowing employees to choose their own health care providers.

Risk & Insurance® congratulates the 2017 Teddy Award winners and holds them in high esteem for their tireless commitment to a safe workforce that’s fully engaged in its own care. &

_______________________________________________________

More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]