Global drone insurance market to reach $1.41 billion in 2025, report
The global drone insurance market is expected to grow from $1.06 billion in 2020 to $1.13 billion in 2021 at a compound annual growth rate, CAGR, of 6.1% according to a new report by Research and Markets.
The growth is mainly due to the increased operations of drones during the COVID-19 pandemic. Also, commercial activities are resuming, which has also increased drone operations. The market is expected to reach $1.41 billion in 2025 at a CAGR of 5.9%.
Major players in the drone insurance market are Allianz Global Corporate & Specialty, AIG US, Avion Insurance, Driessen Assuradeuren, Coverdrone, SkyWatch.AI, Flock, CapriCMW Insurance Services Ltd., Hub International, and Air1 Insurance.
The drone insurance market consists of sales of drone insurance by entities (organizations, sole traders and partnerships) that provide insurance coverage for drones. Drone insurance is the insurance that covers the costs associated with accidental bodily harm or damage caused to property or any assets due to drone operations.
The drone insurance also covers the cost associated with damage in drones. The drone insurance market covered in the report is segmented by coverage type into liability coverage, hull damage, theft coverage, loss or flyaway coverage, payload coverage, personal injury coverage, ground equipment coverage, others; by pricing into hourly, monthly, annually, by application into commercial, personal, others.
North America was the largest region in the drone insurance market in 2020. The regions covered in this report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The high cost of drone insurance is expected to hamper the growth of the drone insurance market in the coming years.
Drone Insurance provides coverage under technical liability and general liability insurance categories. The cost of drone insurance relies on the price of each piece of drone equipment. For example, in 2020 commercial insurance plans vary from $500 to $750 for DJI Phantom drones. Therefore, the high cost of drone insurance limits the growth of the drone insurance market.
The increasing number of drone accidents is expected to drive the growth of the drone insurance market over the coming years. Drones are currently engaged in a variety of sectors that rely on aerial imagery, such as agriculture, insurance, manufacturing, electricity and others. As drones becoming more and more prominent, the risks of a catastrophic crash happening are increasing.
According to the dataset of the military drone crashes, 254 drone crashes were recorded in 2019, with an average of two military drones crashing per month. Therefore, the increasing number of drone accidents drives the growth of the drone insurance market.
The launch of different and innovative insurance products is a major trend gaining popularity in the drone insurance market. Major companies operating in the drone insurance sector are focusing on developing advanced solutions for drone insurance.
For instance, in June 2020, India-based insurer HDFC ERGO has collaborated with TropoGo, a broad tech start-up, to introduce Pay as you fly insurance for drone operators in India. This insurance policy can include coverage to commercial drone owners and users for third-party liability actions for property damages and bodily injury.
The countries covered in the market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.
