Metaverse In The Insurance Industry

While insurers would be using metaverse to engage customers and improve claim experience, they would, in turn, be insuring the metaverse

Although virtual reality is not new to us as the gaming industry has been exploring the trend when Facebook changed its name to Meta, it brought the attention of the world to Augmented Reality (AR)/ Virtual Reality (VR) like never before. Apple, Google, Microsoft and many other companies have been working on metaverse for years and believe that metaverse is right around the corner. The market for metaverse technologies is estimated to have topped $49 billion in 2020 with a promise to grow by 40 per cent each year.

Metaverse is a collection of shared online worlds wherein physical, augmented, and virtual reality converges, and people are able to meet other people, buy products and services, work and visit places and events. The term ‘metaverse’ and its idea is an old one coined in Neal Stephenson’s 1992 novel, Snow Crash and while many virtual worlds exist online, the challenge for today’s idea of the metaverse is to turn these online worlds into one entity.

With virtual reality, a user is completely immersed in the metaverse, which becomes a completely virtual environment. With augmented reality, users are partially immersed — with one foot in the metaverse and one foot in reality.

Companies have started using metaverse in different ways and eventually every company will have a role in the metaverse in the same way every company had to create a mobile website when mobile devices became the centralized method for communication. Let’s see how insurers are going to use Metaverse or how it is going to be impacted by it.

Creating awareness about Insurance

Insurers can use metaverse to increase insurance awareness amongst people. Desjardins Insurance, a Canada based company created an AR-based app that provides video explanations of people’s retirement goals and plans when users choose specific options. With the easy availability of smartphones that are capable of showing AR simulations, insurance companies can easily capitalise on smartphone devices. They can create awareness about the importance of buying insurance in a fun and interactive way via AR and VR technologies.

Insurance Surveys and Loss Assessment using AR and VR

Insurance Surveyors and loss assessors can use augmented reality can use AR to determine the damaged area of various objects and provide 360° assessment by using photos of the damage and building 3D models from them. With the use of AR and VR technologies, technical specialists can understand the damage volume by overlaying object images representing the object condition before and after the accident. Taking into account collected and processed information, they can measure the dimensions of damaged parts and calculate the required repair costs.

It would also allow insurers to maintain customer claims in a much faster way and across a wide geographic location. By leveraging the customer’s smart device, surveyors can gain remote visual access to the claim object. They can pause or live video, highlight any point of their interest, and save necessary images and facts to the customer’s claim. The primary value of these AR and VR technologies for insurance experts is the capability to precisely estimate the damage without physically being situated within the cause area.

AR and VR Technologies Enables Warning About Danger in Homes

Allianz, a worldwide known insurance company based in the UK, has used the capabilities of AR and VR technologies to increase customer awareness about many dangers that they may face in their homes. When they enter the house with a built-in smartphone camera-enabled, they can see various hidden dangers on a display of their devices, such as a smoking and sparkling toaster, breakage of the bathroom

floor caused by sink floods, cracking aquarium, etc. AR and VR technologies are among those new-age technologies that can provide insurers with a winning advantage in the form of a modern interaction with customers.

Insuring the Metaverse

On one side, insurers would be using metaverse to engage customers and improve claim experience, they would also be insuring the metaverse. Users of the metaverse will be protected against any potential vulnerabilities that could affect their assets in the metaverse itself. With every purchase of different units of virtual currencies, tokens, and digital assets used for transactions within the metaverse, users get proof of their purchase in the form of a special token or Non-Fungible Tokens (NFT), powered by smart contracts — which are essentially vulnerable to an abundance of unforeseen frauds/hacks. Insurance companies can provide insurance to these smart contracts.

Although the Metaverse is currently small, it has big ambitions. Insurance companies should be building parallel systems that they can eventually use to transfer their daily activities to the virtual world. Designing immersive user experiences and streamlining digital processes will also help insurers and their customers flourish in an increasingly digital future.

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