New Frontier in UX, Risk Coverage

Insurers that move swiftly and wisely to use the metaverse can enhance customer engagement and create new revenue streams.

Abstract circles representing the digital world and the metaverse across a blue background

The metaverse is coming — fast. In PwC’s 2022 US Metaverse Survey, 82% of business executives (including 87% of insurance executives) said they expect metaverse plans to be part of their business activities within three years. Insurers that move swiftly and wisely to use the metaverse can find success in two ways: 

  1. Enhance operations and customer engagement by engaging employees, customers and policyholders in new ways.
  2. Create new revenue streams through coverage of new, metaverse-specific risks.

Here is a brief rundown of some of the main opportunities in each area — and five guidelines to help seize them.

Engage and excite your stakeholders

The metaverse is on its way to becoming an immersive, global and decentralized digital world that blends seamlessly into the physical one. This new world can enable insurers to reach customers in new ways and deepen relationships with existing ones. It also can help insurance employees pick up new skills, collaborate more intensely and do their jobs more effectively — all while potentially cutting costs. It can, for example, help:

  • Upskill the workforce in new ways. Metaverse tools available right now can train employees in hard skills (such as risk or damage assessments) and soft skills (such as leadership and resilience). Metaverse “campuses” can support remote work, collaboration, recruitment, onboarding, performance management and more. These tools can be both lower-cost and more effective than in-person equivalents.
  • Transform underwriting and claims. Instead of (or in addition to) sending staff to inspect physical properties in person, your employees can inspect their digital twins in the metaverse. These detailed, interactive, continuously updated 3D models can help your people better assess risks and identify risk-mitigation measures. That can support more accurate, lower-cost underwriting. Digital twins can also enable claims assessors to virtually walk through an incident scene. They can then better determine damages, recreate and simulate incidents for training and service claims faster. 
  • Captivate customers. Offices in the metaverse enable carriers and clients to share information and ideas (e.g., the results of the 3D model assessments we mention above) and assess coverage needs via a personalized and personable immersive experience while saving time and resources.

Close the protection gap — and increase revenue

Like any new set of technologies and experiences, the metaverse offers new risks. There sometimes are metaverse “accidents” (such as service outages at key moments), as well as criminal and malicious behavior including scams, financial fraud, intellectual property theft, data breaches and abusive behavior. 

Because few of these risks are covered today, insurers could create new lines of business through metaverse-specific products. Although it will likely take time to properly assess and price some of the newest risks, there are several potentially attractive entry points for insurers that understand the metaverse and its underlying technologies.

  • Digital assets. Digital assets in the metaverse aren’t just cryptocurrencies. They also include NFTs, avatars and virtual real estate. Some are highly valuable. Most are blockchain-based and don’t run through traditional financial institutions, so there may be no recourse if they’re lost or stolen. Virtual real estate also carries new risks, ranging from “cybersquatting” and vandalism to missed mortgage payments, operational failures and new legal liabilities. Demand already exists for insurance against these and other digital asset risks. As the metaverse matures, this demand could grow exponentially. 
  • Events and entertainment. More and more brands are hosting metaverse events, which include product launches, fashion shows, concerts and parties. Most risks related to these events are familiar, but “translated” into a digital world: surprise cancellations or delays, technical failures and threats (such as abusive behavior or cyber attacks) to attendees’ health and safety. All these could lead to financial losses or legal liabilities for companies — many of which find insurance appealing.
  • Intellectual property. When companies put their IP and brands into an immersive digital world, they also may make them vulnerable to cybertheft. Deepfakes and other forms of digital fraud on the metaverse can also infringe on content, trademarks and copyrights, causing financial loss and reputational damage. Metaverse platform providers and marketplaces may also be liable for some of these IP violations. Savvy insurers may be able to build on traditional IP policy coverage to cover these and other related threats in the metaverse

See also: The Metaverse and Financial Services

Five steps to help start or accelerate metaverse initiatives

To take advantage of the metaverse’s opportunities, insurers will need to:

  1. Set a strategy. Chart a course for sustainable success in the metaverse by assessing market opportunities and your own current and potential capabilities. Consider immediately available business outcomes as well as the potential for business transformation and all-new revenue streams. Your strategic assessment can include limited, low-risk tests of new technologies and products with select groups of employees and customers.
  2. Choose the right tech. With your strategy in place, determine which technologies and related processes you’ll need. This requires not only choosing the right metaverse platform — based on business and customer preferences — but also buying or developing metaverse-specific technologies (such as specialized AI) and crafting appropriate procedures and controls. 
  3. Build skills. For internal use cases, business growth and risk management, the metaverse requires new skills. Fortunately, you can teach basic skills through training in the metaverse itself. For more advanced ones, you may need to send your tech experts for focused training, make new hires, or work with third parties that can provide the key skills you lack.
  4. Build in trust. Among the new metaverse-specific risks that every company must manage, insurers should pay special attention to (fast-evolving) regulatory developments and to security. It’s also important to go beyond the letter of the law and design trust upfront and throughout your metaverse operations — rather than having to make fixes later. No one wants to make headlines for suffering a metaverse scam, security breach, privacy violation or tax penalty, and insurers naturally prefer to avoid these risks.

Learn and grow. As you begin to launch metaverse products for business and enterprise use cases, have measures in place to keep managing your risk appetite and expand your offerings. For example, if you begin by adding metaverse-related line items to existing coverages, you may soon be able to offer whole new lines of business as you deepen your institutional understanding of the metaverse.

Marie Carr

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Marie Carr

Marie Carr is the global growth strategy lead and a partner with PwC's U.S. financial services practice, where she serves numerous Fortune 500 insurance and financial services clients.

Over more than 30 years, her work has helped executive teams leverage market disruption and innovation to create competitive advantage. In addition, she regularly consults to corporate boards on the impacts of social, technological, economic, environmental and political change.

Carr is the insurance sector champion and has overseen the development of numerous PwC insurance thought leadership pieces, including PwC's annual Next in Insurance and Top Insurance Industry Issues reports.


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