July 4th, 2023 – In early June, Apple introduced mixed reality glasses. The Californian tech group is bringing a breath of fresh air to the Metaverse topic, which had recently become quiet. Away from the hype, however, specific fields of application have already emerged. There are also interesting possible uses for the insurance industry, for example in claims processing, but also in initiating contacts and providing advice. Corinna Erken, head of the innovation unit at Signal Iduna, writes about the prospects in a guest article.
The metaverse was one of the biggest hype topics in the technology sector in recent years. Observers see the avatar worlds as the next logical step in the development of the Internet, which brings physical and virtual worlds together. In these spaces, people should be able to act, work and act as avatars.
- Corinna Erken (Image: Jannis Keil)
The topic received worldwide attention when the Big Tech Facebook announced investments of 100 billion US dollars in the further development of the Metaverse in October 2021 and unceremoniously renamed itself “Meta”. Companies from a wide variety of industries, including banks and insurers, followed “Meta” with pilot projects in virtual worlds.
In the meantime, he estimated Financial services provider Bloomberg the sales potential of the metaverse to up to 800 billion US dollars – and that already in the year 2024.
No fully realized Metaverse yet
These high expectations have not yet been met. The question of whether the Metaverse could become an important channel for insurance companies cannot currently be answered with certainty.
So far, there is no fully realized, decentralized metaverse technologically. But the current state of development also offers interesting fields of application for the insurance industry as a whole and especially for sales.
ADVERTISING
Aside from the hype, concrete “use cases” emerge
At this point it is worth differentiating the Metaverse as a vision of a virtual world and its technical foundations. Metaverses are based on a combination of different technologies, including, for example, extended reality solutions that can be used to combine real and virtual environments.
Extended reality solutions have been gaining influence in sectors such as retail and industry for years. Augmented Reality-Applications (AR) supplement virtual elements in the real world and meanwhile manage with commercially available smartphones.
With “Ikea Place”, the retail giant Ikea offers an AR app that uses the smartphone camera to place virtual furniture to scale in your own living room. At the Berlin online optician Mister Spex, users have the opportunity to try on glasses virtually.
In the insurance industry, too, there are already concrete “use cases” such as house inspections via app, which, for example, the Insurtech fly reel offers (now part of Lexisnexis Risk Solutions). Owners can carry out inspections independently and easily record risks and damage to existing buildings.
How do metaverse technologies create added value in sales?
In damage visualization, too, completely new possibilities open up for sales with the necessary technical know-how to make potential risks and damage accessible to customers via their own end devices.
For example, extended reality simulations that simulate the consequences of a flood on your own premises are conceivable. Anyone who can follow the water level “live” with their own smartphone in their hands develops a clear awareness of possible risks.
How the process of a claims settlement works, has the Munich Reinsurance Company AG in Munich (Munich Re) shown in a virtual showcase. Customers can follow the individual stages from the burning house in the neighborhood to the finally processed claim. For the industry, the metaverse could also be an arena in which the often complex processes can be experienced.
Use in counseling sessions
Some insurers are already using metaverses for consultations. In virtual agencies or branches, users can find out about risks and products or interact with sales staff via avatars. In the information phase before a contract is signed, metaverses can become a low-threshold contact zone for interested parties and consultants, similar to social media platforms.
However, the necessary regulatory basis for concluding contracts in the metaverse is currently still missing. In addition, it is not yet a mass market.
Decentraland, one of the most popular Metaverse platforms, claims to be used by around 50,000 users every month. The need for platform-specific insurance services for digital assets as well as for cyber risks will therefore increase in the long term.
Practical experience central
Regardless of the degree of maturity of the previous metaverses, the technical basics already offer exciting initial application scenarios for insurers. For the industry, these use cases are a good opportunity to deal early with the new needs of an increasingly digitized world whose technological standards are changing at a rapid pace.
In order to react adequately to the rapid change, practical experience as a basis for authentic expertise is central. True to the motto: If you want to ride the wave, you have to recognize it early on.
Corinna Erken
The author is Head of signals (Co-Lead), the Innovation Hub of Signal Iduna group in Berlin.