Unmanned Drones Now Have "Compulsory Insurance," First Policy Already in Place! Insurance Companies Rush into Low-Altitude Insurance Market, Over 40 Companies Have Launched Around 180 Products

The mandatory insurance coverage in China’s low-altitude economy sector has achieved a “breakthrough.”

Recently, PICC Property and Casualty Insurance jointly issued the first policy for the pilot project of mandatory liability insurance for unmanned aerial vehicles (UAVs) in Chongqing, providing a risk coverage of 42.6 million yuan for 194 drones operated by China Aerospace Science and Technology Corporation’s Aerospace Era Low-Altitude Technology Company. This marks the official establishment of China’s first mandatory liability insurance mechanism in the low-altitude economy sector in Chongqing.

The Re-Think Institute estimates that the low-altitude insurance market could reach 8 to 10 billion yuan by 2035. Currently, most property insurance companies have entered the low-altitude insurance field. According to the “Property Insurance Company Filing Product Directory” on the website of the China Banking and Insurance Regulatory Commission, there are about 180 insurance products related to low-altitude economy/unmanned aircraft/drones, offered by over 40 property insurance companies.

However, industry insiders believe that the low-altitude insurance sector still faces challenges such as limited product offerings. Most products focus on traditional third-party liability and aircraft damage insurance, with insufficient coverage for emerging risks like R&D testing, cybersecurity, and professional liability. How insurance companies can innovate products and services to tap into the potential of the low-altitude insurance market remains a key focus for the industry.

Preliminary establishment of mandatory UAV liability insurance system by 2027

In February this year, the National Development and Reform Commission, the China Banking and Insurance Regulatory Commission, and the Civil Aviation Administration of China issued the “Implementation Opinions on Promoting High-Quality Development of Low-Altitude Insurance” (hereinafter referred to as the “Implementation Opinions”), proposing that “by 2027, a preliminary mandatory liability insurance system for UAVs will be established.”

Yuan Shuai, Deputy Director of the Investment Department at the China Urban Development Research Institute and co-founder of the New Wisdom Production Power Lounge, told the Daily Economic News that the “Implementation Opinions” create a framework for a low-altitude insurance system guided by policy, with mandatory constraints and full-chain coverage. It is the first time UAV liability insurance has been included in the scope of mandatory coverage. By linking insurance with flight approval through pre-approval management, the system aims to improve the safety and control of low-altitude operations from the source, addressing industry pain points such as difficulty in claims and unclear liability in previous UAV accidents.

He believes this not only fills the policy gap in low-altitude insurance but also activates the service capacity of the insurance market through institutional design, promoting coordinated safety management and industrial development.

Recently, PICC Property and Casualty Insurance, as the lead underwriter of the low-altitude economy co-insurance group, issued the first policy for the Chongqing pilot project of mandatory UAV liability insurance, in collaboration with 18 other insurance institutions.

This policy, “Chongqing UAV Third-Party Liability Insurance,” is a tailored insurance product designed specifically for Chongqing’s “megacity + mountain features” low-altitude operation scenarios. It was successfully filed on March 12, with innovative clauses covering risks unique to low-altitude flight such as aerial collisions, operational errors, sudden bad weather, communication loss, and spraying or airdrop operations. The aim is to solve the longstanding issues of inconsistent clauses and imprecise coverage in low-altitude insurance, building a detailed and professional risk protection system.

PICC Property and Casualty stated that, based on the “Chongqing experience” of liability insurance, it will provide replicable and promotable references at the national level to improve the mandatory low-altitude economy liability insurance system, fully supporting the high-quality development of low-altitude new production forces.

Active industry deployment: over 40 insurers have launched about 180 products

Currently, many property insurance companies have entered the low-altitude insurance field, with some leading firms developing a series of insurance solutions.

It is reported that PICC Property and Casualty has systematically laid out related services since 2024, establishing coverage for general aviation aircraft, UAVs, and electric vertical takeoff and landing (eVTOL) aircraft. They have innovated and developed 15 insurance products, forming an initial matrix covering the entire low-altitude industry chain, including R&D, manufacturing, testing, commercial operation, and maintenance. By 2025, nearly 350 billion yuan in risk coverage has been provided for the low-altitude industry chain.

Ping An Property & Casualty’s Deputy Party Secretary and Chairman of the Supervisory Board, Shi Hequn, said that the company has built a comprehensive insurance product matrix covering the entire lifecycle of UAV R&D, manufacturing, and operation. He noted that the rapid development of the low-altitude economy demands higher underwriting, pricing, and claims capabilities from insurers. The company plans to collaborate with industry peers, reinsurance partners, and UAV enterprises to explore suitable insurance solutions for China’s low-altitude economy.

An executive from ZhongAn Insurance stated that the company leverages financial technology to deepen its involvement in low-altitude insurance, partnering with leading global UAV manufacturers to create a series of insurance solutions based on UAV scenarios, supporting the development of the low-altitude economy.

According to the “Property Insurance Company Filing Product Directory” on the website of the China Banking and Insurance Regulatory Commission, there are about 180 insurance products related to low-altitude economy/unmanned aircraft/drones, offered by over 40 property insurance companies, with PICC, China Life Property & Casualty, and JD Allianz among the most active, mainly focusing on third-party liability and aircraft damage insurance.

The “Implementation Opinions” also propose guiding insurance companies to proactively adapt to the development trend of the low-altitude economy, gradually establishing a full industry chain insurance product system covering R&D, testing, manufacturing, flight operations, and infrastructure. It encourages product innovation and service development for new risks such as flight safety, technical safety, cybersecurity, environmental and facility safety, and human operational safety. It also emphasizes increasing insurance supply for medium and large UAVs and further optimizing traditional manned aircraft insurance to form a comprehensive, efficient protection system.

Industry explores precise pricing: how to address the lack of historical data?

Low-altitude insurance falls within the scope of technology insurance, with core pricing challenges stemming from rapid technological iteration, short commercialization cycles, and a lack of historical loss data.

A representative from ZhongAn Insurance explained that in recent years, the integration of low-altitude economy into agriculture and rural areas has accelerated, with UAVs for agricultural pest control greatly improving operational efficiency. However, developing insurance for agricultural UAVs has faced difficulties in precise pricing. On one hand, there is a lack of sufficient historical data to support actuarial models; on the other hand, differences in operational environments and pilot information lead to fairness issues with uniform pricing.

To address these issues, ZhongAn Insurance sets differentiated deductibles for different UAV models to reduce small claim costs and incorporates factors such as UAV usage time and accident history into pricing, enabling personalized premiums and easing the burden on ordinary users.

Gao Chengyuan, an expert advisor at the Low-Altitude Economy Branch of the China Association for Science and Technology, pointed out that current challenges in low-altitude insurance include: 1) data gaps, as flight operation and risk data are scattered among various entities, making it difficult for insurers to build accurate loss databases and risk control models; 2) lack of standards, with responsibilities for new aircraft like eVTOL being unclear, repair pricing opaque, and claims assessment requiring high professional standards; 3) limited product offerings, mainly traditional third-party liability and aircraft damage insurance, with insufficient coverage for emerging risks like R&D testing, cybersecurity, and professional liability.

He suggested establishing industry-level data sharing platforms, connecting insurance information with low-altitude intelligent networks, accelerating the development of scenario-specific clauses and loss assessment standards, and encouraging mechanisms like co-insurance and reinsurance to diversify risk and support joint innovation with industry leaders, transforming from loss compensation to risk reduction services.

Industry experts believe that future breakthroughs will depend on data sharing, AI applications, product innovation, and risk diversification, ensuring both the healthy development of the low-altitude industry and sustainable growth of insurance business.