Drones could replace $US6.8 billion ($9.35 billion) worth of services for insurers in the near future, according to a PricewaterhouseCoopers report.

The paper, called Clarity From Above, estimates the commercial use of unmanned aerial vehicles (UAVs) worldwide across all industries is worth $US127 billion ($174.59 billion).

Insurers can use drones for risk monitoring, risk assessment and claims management, including fraud prevention, the report says.

UAVs equipped with cameras and sensors could monitor areas prone to natural disasters such as floods, droughts, volcanic eruptions and hurricanes. “National governments working with insurance companies can monitor the situation and alert local residents if an emergency arises, allowing insurers to prevent casualties and major damage,” the report says.

Drones could also help insurers more accurately underwrite and tailor policies.

“Insurance companies can use drones to gather information about an object or site to capture its initial state before a policy is issued, or even decide to refuse to issue a policy.”

They could help claims management and fraud prevention by checking the state of properties before and after incidents.

Data gathered allows insurers to build 3D models of property and infrastructure that can help them assess damaged areas faster, more cheaply and more precisely, “as well as providing indisputable documentation to mitigate the risk of fraud”.

Drones can also collect information on the condition of roads, railways and crops.

The report references Aviva’s use of drones to assess flood damage in the UK in January.

While their primary use was to direct company employees on the ground, the UAVs also provided a detailed assessment of damage.

Drones could be combined with other disruptive technologies such as machine learning to improve predictions of damage and more accurately calculate premiums.

PricewaterhouseCoopers recently established a global centre of excellence in Poland that specialises in drone-led solutions.