Industry
Insurance
Reinventing the Insurance Industry with a Digital-first Strategy
Highlights
- According to an estimate, the global metaverse market is expected to be worth around $5 trillion by 2030
- Underwriting teams need to redesign the existing products and restructure underwriting services as metaverse technology progresses
- Using virtual 3D avatars, users can participate in events within the metaverse and interact with the avatars of others
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Introduction
The metaverse market is attracting billions of dollars in investments, with reports estimating it to be worth $5 trillion by 2030. Among the consumers, growing connectivity and demographic tailwinds are the key drivers of growth. As well, metaverse creates virtual communities that can provide immersive client experiences through collaborations, marketplaces, and trainings. To leverage this, many next generation technologies such as cloud, AI, blockchain, IoT, augmented reality, and virtual reality will need to unite and come to the forefront.
Engage customers
Metaverse may drastically change the insurance sales process and enable direct sales activities with avatars in several ways. The main appeal of the metaverse are avatar identities. Using virtual 3D avatars, users can participate in events within the metaverse and interact with the avatars of others. Insurance companies could use this aspect of the metaverse to simulate situations where potential clients would use insurance, enabling them to better understand its value. Virtually experiencing the impact of events like car accidents and fires or illnesses (health insurance), potential customers could realize and recognize risks that they were previously unaware of.
Some insurance companies have already connected with their customers in unique ways through VR. A pioneering South Korean insurer now has a 'virtual counselling window', while other major insurers in the APAC region offer 3D experiences focusing on healthcare, sustainability, and wellness.
Enhance insurance operations
As the adoption of metaverse-based platforms grows, many forecast that digital security risks will grow as well. Insurance industry experts predict that individuals and property will need ever-increasing protection from digital fraud, theft, ransomware, privacy breaches, and business interruption, among other risks. Because of this, insurers are likely to face underwriting challenges as new metaverse-related insurance lines would lack comparable models for pricing.
Underwriting teams need to redesign the existing products and restructure underwriting services as metaverse technology progresses. Metaverse headsets could be used to carry out risk assessments accurately with a more granular view of hidden risk for better modelling and risk rating. The usage of AR and VR technologies provides 360° assessment by using photos of the assets and building 3D models for assessment reports, which would speed up operations, increase customer satisfaction and reduce fraud.
Due to the increasing demand for new cyber products that protect digital assets like real estate, currency, games, and NFTs, insurance providers are beginning to create parallel systems that can be used to deliver their services in the metaverse. Currently, technologies such as Microsoft Mesh can create a virtual underwriting room for an underwriter or broker collaboration and training augmentation.
Enrich customer experience
Following the pandemic, demand for virtual health and wellness services such as telemedicine has increased. Using the metaverse could help health insurers capitalize on trends and offer immersive user experience on an unprecedented level.
There is increasing interest in life and health insurers to integrate metaverse services into their benefits and allow insured customers to interact more closely with the brand.
Immersive VR and AR technology with telehealth services are available that offer virtual telemedicine services that users can access at any time of the day.
Following the pandemic, demand for virtual health and wellness services such as telemedicine has increased. Using the metaverse could help health insurers capitalize on trends and offer an immersive user experience on an unprecedented level.
The road ahead
Despite the enthusiasm around its potential, metaverse technology faces several challenges due to the lack of clarity on legislation as well as data and security concerns. Additionally, the absence of high-performance and high-quality headsets that can provide a realistic virtual immersion, as well as the metaverse’s dependence on expensive AR, VR and MR technologies might slow down adoption at the estimated scale. Insurers must stay abreast of both incremental and revolutionary innovations and better understand the metaverse’s wide range of capabilities to be ready for the evolution of new products, channels, and business model innovations.
