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August 05, 2019

Insurtech news: Flock launches a new enterprise product for drone fleets

Interview with Ed Leon Klinger, CEO of Flock

Key Takeaway
The drone market is growing at a rapid pace and brings unprecedented opportunities, with the majority of growth occurring in commercial activity.

Oliver Wyman's Paul Ricard connects with Ed Leon Klinger, CEO of Flock at our OW Studio in New York City.  

Flock, a young, energetic, London-based insurtech, is working with global insurers to capture new markets and to make the world a safer, smarter place. The company’s real-time data and technology is transforming the drone and insurance industry.

Since its launch three years ago, Flock now insures 30% of the UK market, focusing predominately on companies using drones for commercial purposes. The insurtech has also built a successful partnership with Allianz, the world’s leading aviation insurer, and Flock’s intelligence engine has analyzed and priced risk for more than 500,000 drone flights.

 “What we did was build a real-time risk analysis platform specifically for the drone industry,” says Ed Leon Klinger, CEO of Flock. “It can ingest real-time data such as weather conditions, location, information around traffic conditions and population density to ascertain and quantify the risks involved in flying drones.”

The drone market is growing at a rapid pace and brings unprecedented opportunities, with the majority of growth occurring in commercial activity. Today, corporations are using drone technology to reduce costs, improve safety, and enhance efficiency. Opportunities and use cases for drones continue to emerge—from conducting safety inspections and performing aircraft checks to delivering parcels and mobilizing humanitarian aid and natural disaster relief efforts. According to Oliver Wyman analysis (see exhibit below), aerial autonomous vehicles will represent an annual market of $108 billion dollars (97B) by 2030.

Flock is seizing these opportunities and putting risk information directly into the hands of its users. Ed says the company’s innovative insurance model transforms the way organizations understand, manage and mitigate their own risks.

 

OLIVER WYMAN ANALYSIS


What was once just imagined in movie sets for the distant future, the imminent introduction of autonomous flight and drones will revolutionize how we think about transportation, logistics, and retail across the globe.  

David Marcontell

General Manager, Oliver Wyman CAVOK.


 

FLOCK INSURANCE AND RISK MANAGEMENT PRODUCTS

The Flock Cover mobile app, launched in 2018, introduced Europe’s first ‘pay-as-you-fly’ drone insurance solution. It enables commercial and recreational pilots to fly safer and purchase customized equipment and liability insurance on demand—lasting from one to eight hours.

“Individuals and companies can purchase a policy exactly at the moment they need it—at the hour they are flying,” Ed says.

This pay-as-you-fly product marked a dramatic departure from traditional insurance, using advanced data-driven analytics to quantify, mitigate, and insure drone flight risk in real-time. Customers can actively take steps to reduce risk in their flights, such as weather conditions, so they can save money—and lower their insurance policy price by an average of 15% as a result.

UNLOCKING EXPOSURE-BASED PRICING AT SCALE

This year, the company is continuing to expand and create new value for customers. With the rapid proliferation of commercial drone opportunities, Flock saw a need in the marketplace. Most recently, it launched Flock Enterprise, the world’s first real-time insurance and risk management product for drone fleets.

Ed says Flock Enterprise is targeted at larger organizations that have pilots on a global scale. It allows larger enterprises to pay for insurance only when they use it. “We are empowering an insurance product with the same real-time risk engine as Flock Cover,” he says. “We provide them with a highly bespoke, highly customized product that is charging them for the precise amount of risk that they actually undertook as an organization.”

Ed says that organizations using Flock as an insurance provider are now able to gain greater visibility into flight risk, fly safer flights and save money on their premiums.

“The price that they pay for that policy will be bespoke to the job they are doing,” Ed says. “So, if they are flying on a very windy day or in high risk conditions, we would charge them more for that policy. And if they are taking the steps to mitigate risk in their flight they will be rewarded with cheaper premiums.”

 


 

FLOCK ENTERPRISE RISK INTELLIGENCE ENGINE

The Flock Enterprise Risk Intelligence engine analyzes and prices real-time flight risks for drone fleets. By using these insights, enterprises can proactively improve safety standards across fleets and reduce insurance premiums as a result. 


 

BUILDING SUCCESSFUL INSURTECH PARTNERSHIPS

Ed says that Flock initially partnered with Allianz to launch Flock Cover, the pay-as-you-fly product. “As our partnership has grown, we have expanded into a vast range of products that we never anticipated when we first started the partnership,” he says.

“Allianz provides risk capital, so they are the underwriter in the equation and we act effectively as a digitally-friendly broker,” Ed says. “And we are using our technology to effectively price, sell and distribute the insurance products provided by Allianz.”

Ed says that Flock is also starting to work with other innovative, digitally savvy insurance companies that are looking to embrace this new wave of insurtech. “The vision for us is expanding the use of our real-time risk platform into new verticals,” he says.

As for advice to up-and-coming insurtechs, Ed counsels “Be open and transparent in what it is you are trying to achieve. Don’t be so protective over your idea that it actually stops you from being able to talk about it in public. If you are passionate about what you do and have an idea that can change the world, talking openly about it is the absolute best way to get people aligned behind your mission.”

 

 

Photo: Flock's CEO Ed Leon Klinger and Founder Antton Peña.   

Flock is seizing these opportunities and putting risk information directly into the hands of its users. Ed says the company’s innovative insurance model transforms the way organizations understand, manage and mitigate their own risks.

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