As the life insurance industry continues on its digital transformation journey, a new technology is on the horizon—the metaverse.
According to the Accenture Business Trends Survey, respondents from companies that have some form of a strategy around the metaverse believe that in the next three years, a 4.2% share of their revenues will come from new products, services or business models related to the metaverse. This represents a value of $1 trillion globally.
Accenture sees the metaverse as a continuum of converging 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 (NFTs), social platforms, e-commerce, and digital marketplaces. What it means for life insurers depends on the combination of technologies and how they can be used to add value for customers, employees and stakeholders.
For life insurers, these technologies could impact how we protect and underwrite risk. We may see a new generation of insurance technologies—”insurtech 2.0″—that can leverage these new and emerging technologies to not only improve risk assessment, but also to simplify life insurance processes across the value chain. So, instead of focusing on front- or back-office efficiencies alone, which can provide incremental improvements, insurers can apply these technologies using a holistic digital strategy for 360-degree value.
It’s encouraging to see that more insurers are updating their core insurance processing systems to accelerate digital transformation, a move that could position them for success in the metaverse. They’re extending the value of these systems using application programming interface (APIs)—often pre-integrated with the core system of record—to quickly enable added front- and back-office capabilities from third-party providers. Typically, automation is layered in to further accelerate digital processes like underwriting and claims.
As metaverse technologies mature, insurers could 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 a virtual world to help consumers digitally obtain and service a policy. This is welcome news for consumers who, at the very least, expect agents to know who they are and their purchase history; and expect a faster response to their changing needs.
While some insurers expect a tougher economic climate ahead, they realize that technology investment can strengthen profitability while also adding long-term strategic value. Personalization, faster policy issuance, and connectivity with third-party platforms in customer relationship management (CRM) and health and wellness are just a few ways insurers can apply technology to simplify the customer experience. For example, unlocking siloed data from legacy systems enables insurers to glean more value from the data they already have. Moreover, creating interoperability across customer-facing functions helps simplify sales and servicing, adding more convenience for employees and consumers alike.
Yes, the term metaverse may be broadly used, however, when you consider the technologies underpinning the metaverse, you quickly begin to see its potential to disrupt and to accelerate innovation in our industry.