As the use of drones are picking up among the various industries, they pose new challenges for the re/insurance industry in terms of assessment of their risks and developing relevant covers for them.
While the insurance industry is fairly mature in terms of its growth trajectory, drones present a new paradigm in terms of industry contours as new applications are found and deployments increase,’’ said Alice Vaidyan , CMD, GIC Re, while addressing an `Aviation insurance symposium 2018’’ organised by Global Insurance Brokers along with the partnership of GIC Re and New India Assurance on Friday in Mumbai.
Drones being allowed to fly beyond line of sight and being considered as near satellite will propel their usage massively. Electrical transportation and electrical aviation is another exciting developing area, added Vaidyan.
“As innovation continues apace, I wonder how the micro-aviation, if I may use the term, will develop in the years to come. It is quite possibly waiting for a humdinger of an innovation.’’ Observed Vaidyan.
While pointing out that the emerging and developing markets have historically looked at developed markets for emerging trends and cues as to how to handle new developments and for adoption, she explained “increasingly adoption in our markets will be at par with or faster than these markets and we are left to our own devices. We should be ready for this and drones could just turn out to be an example of this.’’
In 2017, there were no fatalities on passenger jet flights. And the fatal accident rate was one for every 6.7 million flights. However, due to its appeal and visibility, it remains an attractive target for terrorism and anyone who wants publicity.The challenge from terrorism is being handled quite well during over last decade and a half. But I remain unsure about cyber risks, she said, noted Vaidyan.
.India is the third largest aviation market going by domestic air traffic and 6th largest for domestic and international passenger traffic. As the process of economic convergence continues apace whereby India does the catch up with middle income countries, aviation will easily be among the sectors most benefitting from this trend, said Vaidyan.
While the aspiration of the country to create a reinsurance hub remains on the horizon; with proactive approach, Indian insurance capacity can definitely chart a path for developing an aviation insurance hub for Afro-Asian region in foreseeable future, hoped Vaidyan.
“Some players may not know that while we provide capacity at risk level through reinsurance, we also provide capacity and support at portfolio level to insurers. We have been providing ample capacity to the industry and with other risk carriers in the country, provide a significant capacity for this specialised class,’’ she revealed.
GIC Re are the 10th largest global reinsurer based on premium booked during 2017-18 and the 4th largest aviation underwriter by capacity.