Drones, artificial intelligence (AI) and the Internet of Things (IoT) are considered the top three technologies that will impact claims, according to a new report by Boston-based insurance research firm Strategy Meets Action.

The report, The Impact of Emerging Technologies in Claims, outlines why the three offer the most potential and the lowest risk for claims.

Karen Furtado, a partner at SMA and the report’s author, said that drones and aerial imageryprovide an opportunity for safer claims handling and quicker loss assessment, while using AI can yield better customer experience and data intelligence gathering and analysis. The Internet of Things offers claims departments the ability to provide better risk mitigation.

“Claims and emerging technologies are a good fit because we are already monitoring metrics like claims settlement timeframes and customer satisfaction that can be used to measure any impact from a new technology,” said Furtado. “When an insurer deploys a fleet of drones following a CAT (catastrophe) event, customer feedback and claims results may show improvement justifying further investment. Claims also offers plenty of opportunities to try something out without committing a lot of time, money or resources.Gamification could be used to train the extra phone support needed after a CAT, but it can be tested with a dozen CSRs in a single location before rolling it out to a larger group.”

Insurers need to decide which of the emerging technologies offers the most benefit to their claims processes, Furtado wrote, noting that “Artificial intelligence, for example, is not subject to the privacy concerns and growing regulation of drones and IoT devices.” SMA also gives specific examples of how these technologies are now in use or could be applied to insurance claims, ranging from CAT claims assessment via drone use to virtual agents using artificial intelligence technology to IoT’s capacity to alter risk management.

Furtado said that “IoT devices are most likely to play a role in the reconceptualization of risk management rather than the potential improvements that drones can bring to on-site claims assessment of dangerous or difficult-to-access areas.”

Novarica, an insurance technology strategy research firm, outlined how these technologies will likely transform commercial lines.

According to a report released last month, insurers’ need for adjusters and investigators onsite will be reduced by the use of drones, the IoT and robots. The authors, Jeff Goldberg, vice president of research and consulting and Steven Kay, associate vice president of research, explained that insurers will benefit from advanced technology.

“Autonomous vehicles and telematics may greatly lower claims frequency (though severity will be higher, due to expensive complex embedded systems),” wrote Kay and Goldberg.

Binod Jha, global product manager for insurance solutions and Amol Kokane, senior development manager for insurance and risk management solutions at the business analytics and software company SaS, outlined how the IoT will be a game changer for insurance in a January 2015 blog. Benefits such as lower claim severity and frequency, improved claims service and higher customer satisfaction were a few of the benefits affecting claims.

Jha and Kokane said that in auto lines, insurers could expect to see improvements in claims processing resulting from UBI telematics providing automatic notification of accidents and possibly theft. As far as property lines, insurers could see smart homes and buildings sending automatic notifications of damage or breakdown thereby limiting potentially severe losses.

“Home, office and industrial equipment can all be remotely monitored for ongoing situational assessment. Any measured factor leading to malfunction or damage can trigger notifications to repair shops or manufacturers for prioritized service. Smarter carpets that detect falling incidents can notify medical assistance, reducing staged accidents and liability claims. The scope of pragmatic applications is just beginning to emerge,” said Jha and Kokane.

And researchers speculate many more uses will surface.

“Today’s emerging technology will be used tomorrow in ways we have yet to imagine,” Furtado said. “This report gives insurers concrete information that they can use to explore the potential of emerging technologies in the claims arena. Even if insurers don’t invest and start experimenting now, our insights give them strong evidence for the growing importance of incorporating new technologies into insurance operations as well as ideas for how exactly to begin to use them. Whatever insurers do, they cannot ignore emerging technologies and their extreme potential for transforming the insurance industry as well as the rest of the world.”