Wary insurers bring drones back to earth - Paper Watch

Miles Costello writing in the Times

They are set to be used for everything . from delivering Amazon parcels and producing spectacular bird's-eye-view movies to catching poachers and in­specting hard-to-reach rooftops. But one thing may have been overlooked amid all the excitement about drones -getting the necessary insurance.

The lack of harmonised international regulation, the danger of cyber attacks and worries about the competence of human drone operators are growing concerns of the insurers that provide cover for the industry, according to a new report.  Leading figures in  the Lloyd's of London insurance market have warned that unless the burgeon­ing industry for commercial drones pulls together a basic set of regulatory standards, it could be harder to secure insurance cover.

The world's oldest insurance market calls on manufacturers, operators and regulators to work with insurers to make sure that the risks associated with commercial drone activities do not es­calate to the point where-underwriters balk at providing protection.

Nick Beecroft, the manager of emerging risk and research at Lloyd's, said:"If nothing happens, the key impli­cation will be greater uncertainty.  Drones have significant potential but at the same time they are a controversial emerging technology. As the market for drones continues to grow, so does the interaction of risk exposures."

The market for drones, which in Britain is regulated by the Civil Avia­tion Authority,  is expected to reach $9 billion by 2024, according to the Teal Group, double the size that it was last year.

Jay Wigmore, an aviation underwriter at Tokio marine Kiln and an expert in insuring drones, said that some under­ writers might decide to walk away from the market if the lack of widespread rules made it an unattractive risk.