The insurance industry has long been set in its ways, with slogans reading along the lines of “We’re here to help”, “Made just for you”, and “It’s time to expect more”. But now as we enter the digital age, where the focus is less on ‘function’ and more on ‘feeling’, the metaverse is likely going to provide many answers for consumers, which begs the question, how will an age-old industry like the insurance one adapt?
Josh Hart is CTPO and Co-Founder at YuLife. A serial entrepreneur, Hart has set up numerous businesses across edtech, mobile and now the insurtech world. Having created digital experiences used by millions, Hart’s mission is to make all digital interaction fun. As co-founder and CPTO of YuLife, Hart has been re-imagining the world of insurance, building a company that focuses on helping people to be their best selves; mentally, physically and financially. Prior to YuLife, Josh was a co-founder of Chelsea Apps Factory and key in the development of the organisation, which consulted FTSE 250 companies and grew to well over 100 people, servicing customers such as Google, Standard Life and Waitrose.
Applying the philosophical thought of “if a tree falls in a forest”, Hart observes how the insurance industry could respond to the rapid uptake of an idea of the metaverse and what it must do to continue evolving with the times:
In the short time since Mark Zuckerberg’s metaverse dropped, tech and business leaders have been scrambling to predict how the fusion of individuals’ digital and physical identities will impact industries across the board.
Insurance is no exception.
In the years ahead, the metaverse will be part of a growing conversation around how insurers can increase their appeal to new types of consumers, and how policyholders can reduce their own levels of risk to create reciprocal benefits for themselves and their insurers. In short – as people and businesses flock to the metaverse, insurers will need to follow.
Historically, the insurance industry has not always rushed to embrace innovation. But this only compounds the need for today’s burgeoning insurtech industry to tap into growing technological trends to create engaging, user-friendly products that add ongoing value.
Though the metaverse holds great promise, it’s still a new arena – but for insurers to find a fruitful future there, they must start laying their virtual foundations now. Here are some ideas as to how that might happen:
A digital experience – it’s fun!
A common challenge today’s insurers face lies in driving customer engagement. Take life insurance – for a long time, it was assumed that once an individual acquired a life insurance policy, they wouldn’t need (or want) to engage with it in any meaningful way until the worst-case scenario finally occurred. That model is no longer sufficient for modern consumers, who seek ongoing value from their financial products.
Game mechanics offer a solution. When a consumer knows that they can gain rewards through reaching certain milestones or overcoming certain challenges, they are likely to feel much more short- and long-term engagement via the pursuit of these goals. For instance, an insurance policy that enables members to reduce their premium costs in return for reaching certain wellness goals – i.e., step count challenges or weekly screen-time limits – is a win-win for policyholders (it’s challenging and fun) and insurers (healthy living reduces risk) alike.
The metaverse offers a promising backdrop for a gamified approach to healthy living. Game-like challenges can be managed through a virtual platform, complete with avatars, digital representations of behaviour, and social interaction with fellow users in virtual spaces.
Re-defining policyholder’s relationship to the insurer
Platforms that are fun and enjoyable are great for improving user experience and ensuring long-term engagement, but they do not inherently make for a valuable financial product. That is where the Metaverse has the potential to redefine the insurer/policyholder relationship.
Throughout earlier waves of digital transformation, product digitisation was often focused on improving the functionality of customer experience. Need to transfer money from your bank account quicker? No problem. Want to fill your fridge without the need to fill a shopping cart? There’s a grocery delivery app for that.
Functionality is no doubt important, but the emphasis on “function” led to a neglect of “feeling” – “What does this let the customer do?” is different to “How will this make the customer feel?” This is where the metaverse comes into play. The virtual experiences promised by the metaverse will likely allow users to engage with the digital world in a more holistic and more emotional way. One of the goals of the new wave of insurtechs is to start building up a relationship of trust and care between providers and the end-user. Virtual reality spaces might be an ideal way to offer that – integrating the comfort of in-person, personal attention with the ease and efficiency of digital processes.
Insuring the metaverse – the next steps
Some insurers, such as Discovery in South Africa and my own company, YuLife, have already started incorporating elements of virtual worlds into their offerings. There is still work to be done to make these virtual functionalities more all-encompassing, but 2022 may be the year where we see whether virtually integrated insurance can take hold. The metaverse offers an ideal backdrop for that grand experiment.
At YuLife, our approach explicitly aims to reward people for their behaviour in the real world, while offering a digital lens through which people can engage with, track, and understand their real-life activities. There’s no real point in de-risking a digital avatar through wellbeing activities, but there is great value in de-risking real people – while relying on a digital avatar to express that engagement.
But keeping people healthy and secure is just the beginning.
It’s commonplace for insurers to insure valuable possessions – homes, jewellery, cars, etc. Why shouldn’t online creators receive the same peace of mind? Metaverse integration could see the rise of a market for insuring “digital possessions” – everything from NFTs to viral tweets to YouTube videos, all of which are increasingly vulnerable to hacks.
For now, that’s a conversation limited to a tiny minority of the potential insurance policy market. But it is very likely that as the metaverse becomes more and more a part of our everyday lives, we will see insurers prioritising virtual and digital representations of policyholder activity. Those that can do so strategically – harnessing the latest trends in-game mechanics and data science, striking the right balance between a personal touch and digital efficiency – stand to rise above the competition in the metaverse age.
YuLife is a tech-driven insurance company on a mission to inspire life and turn financial products into a force for good. By harnessing the power of gamification and the latest behavioural science, YuLife insurance rewards healthy living and puts everyday wellness within reach of everyone. Founded in 2016, YuLife is headquartered in London and backed by serial investors and VCs including Target Global, Creandum, MMC Ventures, Notion Capital, LocalGlobe, Latitude, Eurazio and Anthemis Exponential Ventures.
Josh Hart, CTPO and Co-Founder, YuLife: https://www.linkedin.com/in/joshnoahhart/