As the commercial use of drones continues to accelerate, making them increasingly integral to the effective and efficient functioning of certain sectors, the global drone industry is predicted to be worth about $43 billion by 2024, with some 2.7 million drones already in operation by 2020.
The latest research indicates that the global drone market is set to grow at a conservative rate of 16% year on year, with exponential investment growth resulting in $6.88 billion invested in the drone industry since 2010.
Similarly, South Africa’s fledgling drone market is also on a growth trajectory, estimated to reach $134.5 million by 2025, according to a report by IndustryARC.
The research house found that local market expansion is underpinned by growth in the mining industry, developments in more data-accurate drone technology, the presence of dominant players in hardware and niche applications.
“What we’re seeing is that the increase in global investment has resulted in an increased number of drone applications and density of drones within an airspace,” says Greg Dillon, lead – sport, events, entertainment, and drones, at specialist insurer iTOO.
“For example, Australia has about a million drones in operation, with estimates that 8% of the population now own a drone.”
A diverse and effective platform
Drones are being adopted by an increasing number of industry sectors as they offer a diverse and effective platform, either as a drone service provider or as an internal business service.
The various applications include inspection/maintenance, mapping, surveying, photography/filming, monitoring, localisation/detection, drone delivery and spraying/seeding.
“The uptake of drones across various industry sectors is driven by a strong focus on time and quality. Companies tend to deploy drones to gain time and cost savings, as well as to improve quality and work safety,” says Dillon.
He explains that, with the rapid growth of commercial drone adoption, there is room to evolve an insurance-based product that, as an active risk management insurer’s tool, covers the in-flight portion of drone operations, where this is typically excluded from most insurance policies.
Insurers could for example leverage the RPAS Launchpad platform says Jonathan Bates from VIO Aviation Solutions, the developers of RPAS Launchpad, which focuses on mission planning time reduction and accuracy, enabling Remotely Piloted Aircraft Systems (RPAS) operators to deploy drones faster while remaining compliant with regulatory requirements.
The platform uses planned mission and pilot geolocations, local weather, drone performance, drone value, liability and cover period to calculate the in-flight risks.
More stringent laws
To date, drone technology has outpaced regulation in South Africa to some extent, with regulators realising that more stringent drone laws are required to counter the increasing likelihood of accidents and incidents
“As the market continues to grow, the insurance of this industry will track and assist this growth by applying new tools and methods to actively risk manage per flight and create auditable drone records and historic flight data, while reducing accident and incident probability.
The availability of electronic data will improve claims processing times and enable the creation of risk assessment opportunities for using historic data points,” says Dillon.
Considering the growing importance of drones within many industries and the tightening regulations that cover their use, it is becoming increasingly important that businesses using drones should consider insurance coverage for these technology assets as well,” Dillon concludes.