Insurance in the Metaverse

Most of us heard about the Metaverse and how it affects the world. Moving businesses and life from the real world to the virtual world. And many wonder how will it affect the Insurance ecosystem: How the sales process will function? How the underwriting process will be transformed??What are the laws and jurisdiction that will apply? How claims will be settled? And what are the major threats and opportunities?

This article addresses the “Metaverse” effect on the insurance industry from the selling process to underwriting, legal and claims ensuring a regulated governance framework, data protection and confidentiality.

Sales: Getting a lead will be much easier as you can identify directly clients looking for Insurance either individuals, partnerships, associations, or public bodies who show interest to purchase an insurance policy either via tenders offering or through insurance search and interest. The Metaverse will identify the clients’ behavior and interest by analyzing searches/interests via social and online behaviors The compulsory insurance which doesn’t require any underwriting could be issued directly; a consent from the client to insurer is required to received needed data.

Virtual face to face meetings will always be present in the Metaverse with the reading of full body language for all parties. Insurance agents or brokers can choose to discuss insurance matters with their clients as well as the most suitable location to close the deal, being at a Golf course where the client can enjoy his favorite hobby, the beach or in a business office. During the meetings, the salesperson can use automatic simulations and options of the required coverage along with the equivalent premium. No application form will be required, a consent from the client to the agent allowing retrieve all required data.

Underwriting: The metaverse ecosystem will be directly linked to our real world. ?Insurance companies and users/ clients will have to share their data directly into the metaverse. For example, medical files on the Metaverse will eventually be linked directly to the client’s hospital, laboratory, or doctor’s office and it can also retrieve the users’ family history records via blockchain technology. No physical surveys will be required for property insurance, as underwriters will be able to check the building hologram from all aspects due to the cameras implemented on site, including the location, the construction materials, among others…. Underwriters will also be able to suggest risk enhancements (such as fire extinguishers, more cameras, fence …). The insurer will be able to retrieve the loss record and previous historical data directly from the Metaverse using blockchain technology. The same trend would go for other lines of business.

Claims:?Again, all documents could be retrieved from the source (id, police report, medical report…) to the insurer via blockchain technology including videos of the incident and claim circumstances. for example, you can have a recreation simulation of the accident or even view the accident itself. All claims will be automatically checked for being in line with the policy wording. ?All payments will be done via crypto currencies where the amount of the claim will be transferred from the Insurer e-Wallet to the client’s e-Wallet.

Laws and Jurisdiction: Eventually, a decentralized system will be created as anyone could buy and sell anywhere in the world on the Metaverse. Everything will be recorded, agreed, and controlled via blockchain protocol leading to contract certainty between all parties and less disagreements at later stages. The laws and Jurisdiction will need a lot of work from governmental bodies and law makers to frame the legal aspect of all buyers and sellers in the marketplace.

Governance and threats: the major threat to the metaverse is Cyber security, Cybercrime, and data protection, whereas Data privacy will be threatened for all hereabove mentioned operations and might be subject to hacking. Yet with the level of investments and innovations created, the Metaverse should be a secure place for operations and payments Being the depository of sensitive data, cyber attackers are investing on finding new threats targeting that universe. Moreover, the metaverse will emerge new approaches in modeling and processing personal data. Hence, an advanced data governance framework should be in place on this universe. It is worth mentioning that this topic is also on the agendas of regulators and governors.

In conclusion, the Metaverse in not only a virtual world on its own, but it will also affect tremendously the real world by changing the insurance industry trends and people behavior in general. Specialized infrastructure will be required in the real world so it could be viewed in the Metaverse. More developed blockchain operations between the public and private sectors leading to creation of new jobs and new educational credentials and specialization mainly in the engineering and IT fields. Yes! Metaverse will affect the Insurance industry while keeping the human touch deeply involved in insurance business leading hopefully to a full digital and human transformation combined. Let us agree! We have all been working in a way or another in the past years to reach there.

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