A New Reality, Best's Review, September 2017
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Augmented reality (AR) and virtual reality (VR) are transforming the insurance industry by enhancing risk management, underwriting, and marketing strategies. Insurers are using VR for safety training and driver competency assessments, while AR applications are improving customer engagement and education. The integration of AR, VR, and drone technology is advancing data collection and claims processes, creating new insurable opportunities and prompting insurers to rethink their business models.
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A New Reality, Best's Review, September 2017
- 1. Insight BEST’S REVIEW • SEPTEMBER 2017 • REPRINT 1 S hortly after Nintendo’s Pokémon GO burst onto the scene in 2016,insurers and agents started paying close attention to both augmented reality and virtual reality. Virtual reality offers a digital recreation of a real-life setting; augmented reality delivers virtual elements as an overlay to the real world,according to Augment.com’s blog article,“Virtual Reality vs. Augmented Reality.” AR and VR have started to impact insurance as a way to improve existing products and processes.Insurers, such asTravelers,use VR in risk management to reduce plant accidents through a VR-based safety training program.Other insurers rely on VR to predetermine a driver’s competency. Not only does VR provide a better risk profile for potential insureds,it also offers insurers a marketing tool for personalized coverage. AR is used even more broadly.For instance,Allianz used AR to create a home accident awareness application for home buyers;the technology, which blends virtual reality and real life,is providing MetLife an interesting way to showcase its dental insurance program and Desjardins Insurance implemented AR in its creation of a personalized retirement investment education tool for prospective clients. As AR/VR use grows,the pace of technology is resulting in further integrations.Using a combination of the two realities is the basis for mixed reality,and a potentially more powerful integration of mixed reality is already being seen in next-generation drones. Before AR, drones (unmanned aerial systems) were primarily recording vehicles that relied on the use of photos or video streaming; there was no way for users to interact with what drones were showing them.By adding AR to the mix,users can now overlay data and digital images onto a video,leading to use cases in multiple settings. The use of augmented reality in drones allows insurers to: • Manage risk.Drones can more easily,more frequently and with less risk capture the latest risk exposure of insured properties and products. • Quantify and streamline settlements.Drones can facilitate settlements by providing faster,more comprehensive visibility to damages, whether the damages are to physical property,buildings or land. • Provide additional underwriting data. Drones can provide more views and different perspectives at any time. When it comes to new insurance products,theAR/VR/drone combination introduces new capabilities in risk definition and management.By gathering more comprehensive underwriting data and streamlining claims settlements,insurers can now create insurable opportunities from where there were none.Even drones themselves have become insurable property. AR/VR,mixed reality and drones are all evidence of the continuing rapid pace of technology and the integration of complementary technologies.Even today,the business challenge facing insurers and agents should not be whether to be more aggressive with technology use but,instead,the focus should be on how current and potential business models are enabled by this technology set. BR By Gates Ouimette Not only does VR provide a better risk profile for potential insureds, it also offers insurers a marketing tool for personalized coverage. Technology A New Reality Augmented reality and virtual reality are opening up new opportunities for the insurance industry. Best’s Review columnist Gates Ouimette is founder and principal of ITconnecter. He can be reached at [email protected]. BEST’S REVIEW www.bestreview.com September 2017 Copyright © 2017 by A.M. Best Company, Inc. All Rights Reserved. Reprinted with Permission. www.ambest.com