From loss adjusting, enabling prevention based natural catastrophe cover and crop dusting (the remote spraying of insecticides and fertilizers), low cost drones are breathing new life into rural China’s farms. The number of drones used on China’s farms has grown from about 500 in 2014 to over 8,000 by the end of 2016. Additionally, the fact that 70% of the world’s commercial drones are already manufactured in Shenzhen only bolsters the opportunity and several property insurers are pioneering the effort with multiple use caes including:
1. Crop Monitoring
The use of satellite images has long enabled insurers and re-insurers to model natcat losses and assess the risk to individual locations and entire portfolios. One of the most active programes is this space is Swiss Re’s Opti Crop, a web-based portal that helps farmers compare information about the state of their crops against regional benchmarks. Swiss Re is also combining it’s weather index product with a satellite-based flood parametric product to assesses agricultural claims based on triggers from satellite and meteorological data ultimately allowing provincial governments to access financing for post-disaster reconstruction and relief. The use of hand held drones can also perform basic crop monitoring functions whilst simultaneously activating precision agriculture by enabling the dispersal of fertilizer, pesticides and herbicides in addition to using water more efficiently.
2. Loss Adjusting
The ability to assess damage caused by natural disasters is currently being enabled through the use of satellite imagery that can prioritize field visits and simplify claims processing in the aftermath of a disaster. However the addition of low altitude drones can augment satellite data by validating claims in addition to delivering search and rescue functions.
China United Insurance tested out 12 new Unmanned Aerial Vehicles (UAV) and related handheld devices designed for agricultural insurance surveying. Specifically, these drones are deployed for the purpose of catastrophe modeling, damage appraisal and claims settlement. This second batch of UAVs is a result of the innovation laboratory jointly funded by China United Insurance and the China Agricultural Information Technology Research Center.
Not to be outdone, China’s largest agricultural insurer, PICC, is also using drones with remote sensing technology to help it appraise damage and settle claims with Chinese farmers. In 2015, when an infamous warehouse explosion devastated the port city of Tianjin, PICC turned to used drones to analyse and estimate the extent of the damage for Volkswagen. Developed in conjunction with the IRSA (Institute of Remote Sensing Applications), the PICC drone is the most advanced unmanned aerial vehicle for civilian use in China and in addition to drones, next-generation handheld devices for agricultural insurance surveys are nearing completion which will further enable data transfer from claimants to China United’s regional branches.
3. Preventative Natural Catastrophe Cover
There is an increasing awareness amongst both property insurers and rural government agencies that it is not enough to respond to natural catastrophes and rebuild livelihoods when they happen, there’s an even more pressing need to invest in disaster readiness and mitigation measures.
Specifically, although the Chinese have already developed sophisticated warning systems for extreme weather events, these systems are now being ported to WeChat, Weibo, QQ and Weibo, to push real-time updates and ultimately incentivise those potentially in the path of earthquake, landslide and typhoon alerts to evacuate.
Several drone development centers have been established including the China Agricultural Information Technology Research Center and the China Reinsurance Catastrophe Research Centre, both of which are developing advanced features for next generation drones.
Low altitude drones are already re-inventing the way property insurers and rural governments are approaching natural catastrophes. Although rural communities are benefiting from the proliferation of drones, it’s important to remember that drone functionality is still in its nascency and drones will soon be able to perform mundane tasks such as pesticide dispersal and remote reconnaissance of regions suffering natural disasters.