“Cyber-attacks, reckless pilots and privacy breaches are fundamental threats to the drone industry.”

That’s the overall conclusion of a new report published by Lloyd’s, entitled “Drones Take Flight.”

The report describes the “drones sector” as a”dynamic and important component of the global aviation industry, with global expenditure on acquisition expected to double to $91 billion in the 10 years to 2024.”

It adds, however, that “concerns around safety, security and surveillance need to be considered by manufacturers and users of this technology. The study highlights five fundamental risks that it says could harm the sector’s future growth.

“Of these, privacy infringement is cited as the biggest most significant concern as well as the carelessness of drone operators and the vulnerability of the drones themselves to cyber-attacks.”

Another key concern highlighted in the report is the regulatory environment, which it says is “developing but is not yet harmonized across international jurisdictions. In addition, because of the rapid and uneven growth of the drones industry, it is proving difficult for regulators to provide strong rigorous oversight without technological support to track and monitor use.

“Effective airspace control and collision avoidance technology, the report contends, will be key requirements for the insurance of drones operating in busy airspace.”

As a result, Lloyd’s concludes that “insurers are likely to seek greater risk mitigation measures from drone operators. These could include training and accreditation, strengthening cyber security and the completion of privacy impact assessments.”

Drones have a controversial image because of their use by the military, but the technology is increasingly being expanded into a number of civil and commercial uses.

Online retailer Amazon has been talking about its plans – called Prime Air – to use drones for parcel deliveries in Britain and America.

The company has already proposed to aviation regulators the establishment of special commercial air corridors. Drones have already been used to deliver medicines and textbooks in remote Australian locations, while the BBC World Service has used them for filming, and Kenya uses them to detect poachers on game reserves.

But Lloyd’s has concerns that negligent or reckless pilots, poor regulation and licensing and the dangers of collision or damage to third parties from drones all represent significant potential risks.

Nick Beecroft, Lloyd’s Manager of Emerging Risk & Research, commented: “Drones have significant potential but at the same time they are a controversial emerging technology. As the market for drones continues to grow, so does the interaction of risk exposures.

“Manufacturers, operators and regulators of drones will need to all work together, on a global basis, to understand exposures and ensure that the drone technology is used safely and responsibly.”

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