Think drones, and military airstrikes or Amazon deliveries come to mind. But San Antonio-based insurer USAA has another idea: Speeding up the claims process for members affected by a natural disaster.
In fact, in April, the $24 billion private company was among the first insurers to win approval from the Federal Aviation Administration to test drones for exactly that use. Founded as the United States Automobile Association in 1922, USAA now provides home, life and auto insurance, as well as online banking and investment services to 10.7 million active and veteran members of the U.S. military and their families.
But though it just earned the feds’ OK to begin its own testing program, USAA has been getting hands-on experience with drones since 2010 through a collaboration with Roboticists Without Borders at Texas A&M University. Academic institutions received some of the earliest clearances from the FAA to send drones aloft domestically, says Kat Swain, USAA Innovation Advisor and UAS (Unmanned Aircraft Systems) Lead. Swain is part of a team of experts in aviation, IT, and legal/regulatory affairs that oversees drone research and development at USAA. She reports to the Assistant VP of Property & Casualty Innovation, Jon Michael Kowall.
Merging Two Skills
“I have a lot of experience in the insurance industry in claims and underwriting,” says the 16-year company veteran. And not only did Swain earn her pilot’s license in her teens, she went on to fly commercially and become an FAA-certified flight/ground instructor, teaching at the Holloman Air Force Base in New Mexico, before returning to USAA. Running the drone program, she says, “has been a unique opportunity to marry the two careers.”
Tests in Washington State
USAA has two PrecisionHawk Lancaster drones, right, which are registered with the FAA, and is researching other drone platforms suitable for its business needs.
In several years of exploring the potential of drones, USAA has already gathered some early data on what they can do. For instance, when a catastrophic mudslide hit Oso, Wash., last year, 43 lives were lost, 49 buildings were destroyed, and a state highway was entombed in mud. Recovery efforts were still in full swing several months later, when Swain and her team arrived.
Partnering with Robotocists Without Borders, Swain flew several drone missions for a total of 45 minutes over the area, capturing aerial footage that covered 360 acres. The footage surveying the Stillaguamish River Valley in Snohomish County, Wash., ground zero for the mudslide, was used to create 2D and 3D images. USAA shared the photos and videos with Snohomish County officials to assist in rebuilding.
“It was a very humbling and great experience to give back to that community after such a loss,” says Swain. “The drone provided good, actionable data to people on the ground. And it was a great first experience for USAA to see how we can assist our membership if one of those unfortunate situations would affect them.”
Rules Haven’t been Written Yet
Implementing any new technology can be challenging, but testing one for commercial use that is highly regulated by the FAA adds another layer of complexity. “I wouldn’t say challenges,” Swain says. “It’s the road map we have to follow with the FAA.”
Until the FAA has established a set protocol for commercial drone use, companies like USAA will have to wade through red tape and apply for exemptions in order to test the technology, and closely chart their progress as a means of developing best practices, and rules governing safety and privacy. “I was fortunate I had that FAA background and knowledge and could help out with that process,” says Swain, adding that she’s worked in other areas of innovation at USAA, including smart homes technology, but her knowledge of the FAA and experience as a flight instructor has made her central to the drone program.
What is it Like to Fly a Drone?
The drones are small enough to be broken down, loaded into a car, and re-assembled at a test site. The battery life lasts for 30-45 minutes of flight. “We hand launch them by throwing them into the air,” Swain says. And while she’s trained and has a manual backup control for the drone, the PrecisionHawk is an autonomous drone system and flies with pre-programmed GPS coordinates. She laughs and says, “The computer flies it lot better than I can.”
Fast, Efficient & Safer
While the company’s Property & Casualty unit is the first to benefit from the drone usage, Swain says she can see it expanding to other divisions and is researching other use cases that could benefit USAA’s members.
Not only can aerial imagery help settle claims faster, she says, but it can also become a strategic tool to deploy people on the ground when it makes more sense to do so. “On the business side, if I’m going to bring in a new technology, I want it to be cost-effective for our organization.”
ROI
USAA executives expect the drone initiative to cover its costs — and deliver better service to customers at a very stressful time. Mike Burns, Assistant VP of Claims System Development at USAA, says, “For natural disasters, drones have the potential to cut the time at least in half for the entire process of making affected customers whole again. We can use the technology to identify which specific customers have been affected, to quickly triage and organize losses for connection with emergency services and contractors, and to get customers back in their homes and routines quicker than ever before.”
Burns adds, “Drone technology will more than pay for itself in terms of customer satisfaction, efficiency, and mitigation of after-disaster damage from prolonged exposure to the elements.”
If that proves out, the next step for USAA will be deciding exactly how many drones to deploy around the country, and how many operators to train.
