How Has the Rise in Applicability of UAVs Improved the Revenue Share of the Drone Insurance Industry?

In the last few years, the applicability of unmanned aerial vehicles or drones has increased significantly. Companies in almost all sectors of the global economy, including manufacturing, consumer goods, agriculture, transportation and logistics, military, and energy and power, have witnessed increase in adoption of drones to simplify their operations and enhance overall efficiency. However, a restraint in the growth of the drone manufacturing industry is the high costs of UAVs, which make them unviable for small and medium-scale industries. Moreover, since these equipment and tools are delicate and easily susceptible to damage, SMEs find it hard to allocate a sizable amount of their revenue to the maintenance, repair, and upkeep of such drones. Thus, the concept of drone insurance has emerged, which helps the company cover expenses related to damage and theft. 

Growing Demand for Drone Insurance Policies Boosting Industry’s Revenue 

A drone insurance policy is an indemnity scheme that covers theft, damage, loss, or similar liabilities related to an unmanned aerial vehicle. Since most of the drones are employed for transporting different products, many companies offer payload coverage, wherein the goods that are being transported are also insured. 

The primary reason behind the rise in demand for drone insurance is risk mitigation. Since drones are generally deployed to perform tedious tasks of transportation, surveillance, and monitoring, they are prone to unexpected accidents, calamities, disasters, and more. This increases the need for a financial protection policy that covers the cost of such potential mishaps entirely. Furthermore, the medical, legal, and repair expenses are also covered in these indemnity services. 

Moreover, several governments across the globe have enacted laws that make it necessary for UAV manufacturers to provide insurance policies to their clients. For instance, the Directorate General of Civil Aviation (DGCA), a statutory body under the Government of India, has made it compulsory for commercial drone operators to offer a valid third-party insurance policy to its customers. Such governmental regulations have increased the demand for drone indemnity services, creating favorable conditions for the growth of the sector. 

Innovative Product Launches Creating New Investment Opportunities 

Recently, Allied Market Research published a report on the drone insurance market, which states that the industry, which accounted for $1.1 billion in 2023, is expected to gather a revenue of $2.6 billion by 2032, rising at a CAGR of 10.4% during 2024-2032. The launch of innovative products by leading companies is anticipated to play an important role in the growth of the sector. For instance, in December 2022, New India Assurance, India’s largest general insurance enterprise, unveiled its drone protection plan. With this, the company became the first public-sector business to enter this segment. While private players such as ICICI Lombard, Bajaj Allianz General, HDFC Ergo, etc., had already launched similar drone insurance policies, the entry of a nationalized insurance company created new investment opportunities in the sector. 

Similarly, in February 2025, Apollo, a reinsurance firm, and Moonrock, a drone insurance provider, announced a partnership to expand their product portfolio in the coming period. As per the press release issued jointly by the two companies, the growing usage of UAVs for beyond-visual-line-of-sight (BVLOS) operations has increased the need and demand for such specialized indemnity schemes. Moreover, the rise in deployment of these machines in film production and transportation applications has compelled customers to opt for insurance services to reduce their operational costs in the long run. Through this collaboration, both companies aim to cater to these evolving demands of their clientele and expand their audience base globally. 

In conclusion, the growth of the drone insurance industry is attributed to rise in applications of unmanned aerial vehicles in various sectors such as transportation and logistics, manufacturing, and agriculture. In addition, the launch of innovative products by public sector companies and private players is expected to expand the scope of the industry in the coming period.