A.M.BestTV: Insurers Brace For Rising Risks of Drones

OLDWICK, N.J.--(BUSINESS WIRE)-- In this A.M. BestTV episode, insurers are saying surging demand for drones is adding a host of new liability and property exposures. Click on http://www.ambest.com/v.asp?v=drones1715 to view the video program.

The U.S. Department of Transportation estimates that drones will out-number pilot planes in 20 years. With commercial enterprises falling under Federal Aviation Administration regulations, it is estimated that 40% of commercial business will be using drones in five years; as a result, insurers are preparing to offer commercial coverage. A.M. Best Assistant Vice President Henry Witmer addresses some of the liability issues involved with the use of drones. “The liability exposure far outweighs any physical damage exposure to the drones. A.M. Best has noted that on the liability side, there are two main areas of liability exposure: operating the drones and securing the data the drones will possess.”

Additionally, Witmer spoke about the multiple levels of risk involved in using drones. “Risk management is critical, since there could be risks to the general populations, as well as, risks to a large gathering of people, as in the case of a concert. Insurers are going to have identify what the risks are, determine what the potential costs are involved in operating drones from a liability perspective and determine what potential lawsuits may arise from their usage.”

Other people who appear in this episode include:

• John Nelson, chairman at Lloyd’s;
• Carsten Prussog, president of specialty markets at Munich Re America; and
• Terry Rolfe, aviation practice leader at Integro.

Recent episodes of A.M. BestTV include:

• A.M. Best's Mosher: Capital Influx Drives Today's Insurance M&A: A.M. Best Senior Vice President Matt Mosher says capital providers are seeking insurance underwriting expertise, which is changing today's competitive and acquisition environments: http://www.ambest.com/v.asp?v=ma715.
• Global Broker Rankings See Shift Near Top: Best’s Review’s annual ranking of global brokers shows a change at the top of the list, as Arthur J. Gallagher & Co. has moved up to the third position, based on revenues. However, that may be short-lived, since the Willis Group and Towers Watson recently announced their merger, which will give the new company combined estimated revenue of $8 billion: http://www.ambest.com/v.asp?v=brokers715.
• In Europe, Low Rates A ‘Double-Edged Sword’: Managing Director of Analytics Stefan Holzberger explains how the low interest rate environment is creating refinancing opportunities but also is producing mismatched portfolios with depressed investment returns: http://www.ambest.com/v.asp?v=fmeurorates715.
• British European Union Exit Could Hit the U.K. Insurance Industry: Director of Analytics Catherine Thomas speaks about how the city’s standing as a key global insurance center would be diminished if the United Kingdom were to exit the European Union: http://www.ambest.com/v.asp?v=fmeuexit715.

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.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150715006522/en/

A.M. Best Company
Lee McDonald, 908-439-2200, ext. 5561
Group Vice President, Publication and News Services
[email protected]

Source: A.M. Best Company

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