Personalized Insurance for the Drone Industry

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In this interview, Ed Leon Klinger, CEO at Flock, discusses the value of moving away from the traditional ‘one-size-fits-all’ approach to insurance by providing insurers with cutting edge data science that allows them to create new specialized solutions. His insurtech, Flock, has developed the technology and know-how on how to intelligently assess, quantify and insure drone flight risks on an individual basis.

Keep reading to learn how Flock’s data-driven technology is reinventing drone insurance from the ground up, and helping organisations across the drone industry to fly safer.

What problem did you set out to solve when founding Flock?

The problem in the drone industry is that drone flight risks are unpredictable, complex, and not particularly well understood by insurers – the industry is still relatively nascent, so the amount of historical data that insurers have to work with is relatively low. The result of this is overpriced, cumbersome, but often compulsory insurance policies that are not fit for purpose.

At Flock we’re solving this problem using cutting edge data science. By feeding large amounts of data (such as hyper-local weather conditions, population densities, drone specifications and more) through our Risk Intelligence Engine, we have unlocked the ability to do something no one else can: intelligently assess, quantify and insure drone flight risks on an individual basis. High-risk drone flights (such as those undertaken in densely populated areas, or during bad weather) receive higher risk metrics, and therefore higher insurance prices. Safer flights (such as those undertaken in rural areas, or during optimal weather conditions) are rewarded with lower prices.

By moving away from a traditional ‘one-size-fits-all’ approach to insurance, we’re giving drone operators and organisations more flexibility, a greater understanding of drone flight risk, and fairly priced policies based on their personalised risk profiles.

Can you detail the products that your technology has unlocked? And does your insurance platform have applications outside the drone industry?

We launched our first product back in 2018, which was Europe’s first ‘pay-as-you-fly’ drone insurance solution. Through a simple mobile app, drone pilots can purchase short-term policies (lasting from one to eight hours) that are priced proportionally to the real-time risks of each individual drone flight. This has proven to be really popular with SMEs, as it offers them a flexible and fully digital alternative to a traditional annual policy.

In addition to providing insurance, our mobile app also functions as a safety tool: pilots can use it to receive a risk report for any drone flight up to ten days in advance. What this does is equip our customers with the power to proactively optimise towards lower-risk flights, and save money on their insurance as a result. And it’s great to say that the data we’ve collected from analysing more than half a million drone flights has shown that on average, our Pay-as-you-fly pilots typically reduce the price of each policy by 15% through mitigating their flight risks.

Our latest product, Flock Enterprise, leverages our Risk Intelligence Engine at scale to unlock real-time insurance for larger organisations with drone fleets. In a similar way to our Pay-as-you-fly product, the real-time risks of individual drone flights are analysed and priced. With Flock Enterprise, we then aggregate those individual flight prices to calculate a monthly premium, which fairly reflects the actual usage and risk profile of a drone fleet in a given month. We also actively share granular risk insights with our customers, which empowers them to take measures to improve safety standards across their fleets, and be financially rewarded for it.

At the core of our data-driven approach to insurance and risk management is our proprietary Risk Intelligence Engine, which has countless applications beyond drones. We’re now working with insurers around the world to apply our technology to new verticals, which will unlock the ability for insurers to more accurately identify and quantify risk in an entirely new way. This is an exciting next step for Flock and opens up the door for never-before-seen products to be launched in new industries, ranging from marine and aviation, and even to space.

Have there been any challenging moments in partnering with a large insurer such as AGCS?

The main challenge that exists when fast, agile insurtech startups attempt to work with large incumbent insurance companies is that there is often a mismatch in speed between the two organisations. Startups tend to move faster, and are more inclined to take risks – such as putting products in customers hands which aren’t necessarily perfect but get the job done, and then quickly working with those customers to iterate and hone those products based on their feedback.

Whereas traditional insurance companies tend to move at a slower pace, and are typically more risk averse – they want to make sure that their products are 100% ready before going to market with them. So there is a cultural gap that exists between insurers and insurtechs, and that gap can lead to challenges and differences in opinion when working together to launch products and capture market share.

That being said, we have a very collaborative and trusting relationship with Allianz, and have now launched 5 insurance products with them over the last two years. Regularly syncing in with their teams helps to ensure we’re all aligned when building new products, and I have no doubt that our partnership will continue to grow from strength to strength.

How important are partners and what competitive advantages have you achieved through your particular partnerships?

Partnerships are essential at Flock, and we strongly believe that collaboration and the development of healthy ecosystems is key for the drone industry reaching its full and very promising potential.

One key area we’ve focused our attention on over the last two years is partnering with commercial drone flight schools. We’ve now partnered with over half of them in the UK, and provide their students with insurance and safety products that are tailored to the needs of those who are just embarking on their professional drone journey. In turn, these partnerships opens the door for us to reach thousands of new drone SMEs every single year, which helps to grow our community of pilots even further. This is a case in point to how partnerships enable both parties to be stronger, and we’re currently in the process of bolstering our existing partnerships, and also forming new ones with the likes of manufacturers and software providers.

At Flock we’re solving this problem using cutting edge data science. By feeding large amounts of data (such as hyper-local weather conditions, population densities, drone specifications and more) through our Risk Intelligence Engine, we have unlocked the ability to do something no one else can: intelligently assess, quantify and insure drone flight risks on an individual basis.

Congrats on the insurance on drone fleets! How are you fostering innovation at Flock?

We have some core cultural values that help to foster innovation at Flock, and of these values is ‘own it’. This was built on the idea that everyone, no matter how senior or junior they are, should have genuine ownership over their area of the business. We’ve found that this has massively helped to foster innovation because it gives people the freedom and opportunities to set strategies, come up with initiatives, and put together new business cases. And if they can demonstrate why their idea is worth the resource, we will run with it and implement it. This is hugely motivating, as when people feel they are in control and can see their ideas genuinely making a difference, they are energised to come up with more innovative and creative ideas.

Our Engineering Development Initiatives were also built around fostering innovation. One of these initiatives is our fortnightly ‘deep-dives’: every two weeks Flock engineers get half a day to work on, or learn, about anything they want – whether that’s building a feature, or experimenting with a new language. Every three months our engineers will then launch their experimental features, or present their learnings to the team.

Another one of our engineering initiatives is our quarterly hackathon, which is when engineers are given 24 hours to build whatever they’d like, no strings attached. It’s an intense but really fun day (with plenty of pizza and coffee!), and after its done the our engineers present their builds to the team and a winner is chosen. It’s this constant learning and space to experiment which really drives innovation, not just with our engineers, but the entire Flock team.


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Bradley Collins

Bradley Collins