The Disrupters: Flock takes wing with drone insurance model

Business ideas can often come out of the most unlikely places and so it was with insurance start-up Flock where a niche product dove-tailed perfectly with a niche area of risk – drones.

TU-Automotivewent to find out about Flock’s ambitions by meeting co-founder and CEO Ed Klinger at his offices in London’s East End.

Klinger explained that the idea for pay-as-you-fly insurance for the high risk drone market was born out of research being carried out by co-founder Antton Peña. He said: “Flock emerged out of a research project that Antton was doing at Imperial College London’s data science institute. The original purpose of the software was to quantify, accurately, the risk of drone flights in real time.

“This required the need to tap into a large number of data sets pertaining to the risk of drone flights such as real time weather conditions, population densities, nearby infrastructures, traffic conditions as well as information about the drone itself and the pilot, whether that’s a human or a software. So, with the drone, we’re looking at how much does it weigh how fast and high can it fly, what happens when something goes wrong and what is that drone’s history? With pilots we’re looking at pilot experience, flying style purpose of flights and so on.

Klinger said there are advantages to be had from this data from all the stakeholders in the drone flight process including helping regulators to understand risks of flight; operators reduce the risk of their own flights and optimise for those; and also to help insurers to very quickly assess and accurately price the risk involved.

Klinger said: “Having realised the potential of this data, that’s when we decided to found Flock and quickly launched Flock Cover and our first product being released later this year is pay-as-you-fly insurance for drones.”

Flock’s big disruption is to be able to offer a cost effective insurance for this potentially high-risk activity instead of the usual and costly year-term policies that are currently employed. Klinger explained: “So what we have done is to shrink the insurance premium period from a year, which it is now, to a single flight and will be offering policies in the range of an hour, two hours, four hours, eight hours and so on.

“This makes the insurance much more price competitive – we can assess risk accurately on the spot, it allows users to customise their policy for that particular flight, offering the perfect amount of liability insurance for the perfect amount of time. With this we are launching an app that can identify risks around the consumer so that they can avoid those risks so that the less risks taken as a pilot, the lower the risk score and the lower the price. While our focus is on commercial pilots, this cover will be available to hobbyists as well.”

While the drone cover is expected to launch by the end of summer 2017, Klinger believes this is just the starting point for the business model that can be rolled out into other industries. He said: “We are already working on new products including one focused on the brokers but this technology can extend beyond the drone industry and it’s a vision of ours to apply the same kinds of techniques to unlock customisable real-time insurance in other industries as well. We have had an enormous amount of interest from other areas including automotive insurance.”

The technology’s ability to scale from a single sports car drive to a commercial fleet is its chief strength, said Klinger. He added: “We would make sure that any product we launch will be full scalable as a pay-as-you-fly or pay-as-you-X insurance. This is the first piece in the puzzle that is unlocked by the real-time risk analytics that we do and we are focused on building a product for the entire industry that is intelligently priced and easy to access such as through our mobile app. I wouldn’t consider our technology being locked to just pay-as-you-X uses.

“Flock use as a flock of drones and hints at the future as the scalable data related insurance for the autonomous world.”


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