London-based insurtech Flock has released a white paper on insuring drones and exploring the reasons why the traditional risk pricing approach of using historical data won’t work in this rapidly growing market.

The white paper follows Flock’s successful launch in January last year of a policy for drone operators based on a pay-as-you-fly premium model.

Since its introduction, Flock Cover has gained traction in the market as customers have been able to lower their final quote by an average 15%.

The pay-as-you-use principle, or “exposure-based” approach, involves using Big Data to crunch risk numbers. The result is a fairer and more transparent process for customers.

“Traditional insurance has become a burden in the dynamic drone industry; over-priced, inflexible, and opaque,” the white paper says. “An alternative approach to assessing and pricing drone insurance is now required.

“By leveraging Big Data to intelligently identify and quantify flight risks, it is now possible to provide tailor-made policies based on individual risk profiles.”

The insurtech says the result is “highly personalised, transparent insurance pricing, and the ability for insurers to reward drone enterprises for proactive risk mitigation”.

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