As the life insurance industry continues its journey of digital transformation, a new technology is on the horizon: the metaverse.
According to Overview of Accenture Business Trends, respondents from companies with some kind of metaverse strategy believe that over the next three years, 4.2% of their revenues will come from new metaverse-related products, services, or business models. This represents a value of $1 trillion worldwide.
Accenture views the Metaverse as a continuum of convergent technologies such as artificial intelligence (AI), augmented and virtual reality (AR/VR), blockchain, digital twins, Internet of Things (IoT), cloud, digital currencies, non-fungible tokens. (NFT), social platforms, e-commerce and digital marketplaces. What this means for life insurers depends on the combination of technologies and how they can be used to add value to customers, employees and stakeholders.
For life insurers, these technologies could impact how we protect and insure risks. We may see a new generation of insurance technologies – “insurtech 2.0” – that can use these new and emerging technologies not only to improve risk assessment, but also to simplify life insurance processes throughout the value chain. So, instead of focusing only on front or back office efficiencies, which can provide incremental improvements, insurers can apply these technologies using a holistic digital strategy to deliver end-to-end value.
It is encouraging to see more insurers upgrading their core insurance processing systems to accelerate their digital transformation, which could lead them to success in the metaverse. They extend the capabilities of these systems using an Application Programming Interface (API), often pre-integrated with the underlying recording system, to quickly enable additional front-office and back-office capabilities from third-party vendors. Typically, automation is applied to further speed up digital processes such as underwriting and claims.
As metaverse technology advances, insurers may have even greater potential to interact with customers and employees in improved and differentiated ways. Imagine a metaverse-inspired buying experience that combines the physical world of an insurance agency with the virtual world to help consumers digitally obtain and maintain a policy. This is good news for consumers, who at least expect agents to know who they are and their purchase history; and expect faster responses to their changing needs.
While some insurers anticipate a tougher economic climate going forward, they understand that investing in technology can boost profitability as well as add long-term strategic value. Personalization, faster issuance of policies, and connection to third-party platforms in customer relationship management (CRM) and health and wellness are just a few of the ways insurers can use technology to streamline the customer experience. For example, unlocking siled data from legacy systems allows insurers to get more value out of the data they already have. What’s more, interoperability of customer-facing features helps simplify sales and service, enhancing the experience for both employees and consumers.
Investing in technology is critical to compete and retain future life insurance customers in a world that will increasingly depend on the technology of the metaverse.
Yes, the term “metaverse” can be used loosely, however, when you consider the technologies that underpin the metaverse, you quickly begin to see its potential to disrupt and accelerate innovation in our industry.