Cyber attacks and privacy breaches a threat to the drone industry, says Lloyd’s

Although the drone industry has significant potential, the controversial technology is at risk from cyber attacks, privacy breaches and reckless pilots.

This is according to Lloyd’s, in its latest report on the drone industry, Drones Take Flight.

The study highlights five fundamental risks to the sectors growth: privacy infringement, which was named as the biggest risk; cyber attacks, the regulator environment, which is developing and not yet harmonised across international jurisdictions, as well as rapid and uneven growth of the industry.

It also warned that concerns around the safety, security and surveillance of the sector need to be seriously considered by manufacturers. This is especially important considering the sector’s importance to the global aviation industry, with global acquisition expenditure in the drone market expected to double to $91 billion in the ten years to 2024.

Lloyd’s said effective airspace control and collision avoidance technology will be key requirements for the insurance of drones operating in a busy airspace.

Insurers therefore are likely to seek greater risk mitigation measures from drone operators, which could include training and accreditation, strengthening cyber security and the completion of privacy impact assessments.

Nick Beecroft, Lloyd’s manager of emerging risk and research, said: “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 will need to work together, on a global basis, to understand exposures and ensure this technology is used safely and responsibly.”