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Envisioning Virtual Reality in Insurance

virtual reality in insurance

From Gaming to Insurance:

PlayStation and other gaming consoles have kept people captivated over a long period of time, but what Oculus Rift does to its users is magical.

Although the games are same, the experience of being virtually present amongst aliens, racing cars or skyscrapers snaps people out of reality and places them in a different world – a world where your brain is completely absorbed in something superfluous and forgets what’s happening in reality. That’s the power of Virtual Reality and we all can only imagine the impact this technology can have on the Insurance sector.

When Facebook acquired Oculus back in 2014, the move enthralled people who wanted a three-dimensional gaming experience but didn’t really create a stir in the market otherwise. With the products’ launch and other technological breakthroughs, the scope of this skid plates technology seems to have intrigued leaders in diverse industries. Resultantly, this technology is poised to make an impact in all the industries, insurance being one.

Insurers are thinking about utilizing the wonders of Virtual Reality to improve the industry’ landscape in the same way it has disrupted Gaming sector. One of the earliest adopters of Virtual Reality is Travelers Insurance which has collaborated with AppliedVR, a partnership between Lieberman Research Worldwide and Bailenson, to ensure worker safety. They are working on a mobile application that would help reduce the chances of accidents in warehouses and manufacturing plants. Taking a cue from the Gaming world, AppliedVR is trying to create a virtual environment where workers fly across a plant like Superman to save co-workers from accidents.

Impact on Different Segments:

Property & Casualty Insurance: Virtual Reality can bring significant reduction in cost for Property & Casualty Insurers as their underwriters would be able to now examine a facility or warehouse without the need to physically reach the location. Remote inspections would also mean that insures can have a smaller team who can focus on improving their efficiency when travel time is cut.

One other area where Virtual Reality can play a huge role is Risk Management. Travelers Insurance, in fact, is creating a virtual world to help workers manage risk before any hazardous situation arises. This virtual world involves varied risky situations for training people on safety measures to be undertaken if they find themselves or their co-workers in a difficult situation.

Auto Insurance: In the automotive insurance, there are varied opportunities which can be exploited. For instance, a simulated driving test would enable agents to understand a person’s driving skills which in turn would help them design a customized policy as per individual needs. Virtual Reality also helps claim adjusters understand the technicalities of car systems for different makes and models. Without this technology, only the best appraisers get trained on the inner workings of a car, whereas with Virtual Reality anyone could be trained from their desks.

Moreover, in other areas too agents can be trained from the comforts of their desk at a much lower cost than being sent to sites for training.

Early Adopters in the Industry:

  • NRMA Insurance: Back in 2014, Australian insurer NRMA launched a car crash simulation with the help of Oculus headset to enable users’ experience how it feels to be in a crash situation. The insurer intended to promote car safety and believed that until people experience a crash situation they don’t understand it. In the simulation, testers experience a crash sitting inside a real car which moves through a hydraulic system in conjunction with the virtual movements. The Oculus Rift headset allows testers to see outside the windows and experience a crash in reality. 
  • Liberty Mutual Insurance: The insurer utilized the power of virtual 360o video to take viewers through the dreadful scenario of car breakdown in an unfamiliar location. Through the video, viewers can see and understand how to handle such a situation and shows the scary imagery of being struck somewhere far from your home. The video generated millions of views for the insurer and bolstered the fact that when users experience something through a three-dimensional medium, the scenario is etched in their memory. Also, since insurance isn’t something that can engage people very quickly, a 360o video can create a brand identity amongst consumers.
  • AXA Insurance: Another player that used Virtual Reality as a marketing tool is AXA insurance by partnering with Google. The company created a unique engagement campaign by using a mobile app. To reach the younger population, AXA created virtual retail agencies in the game which players could win in a battle of ownership. The game encompassed branded shields to create awareness and engage players for a better identity in real life.

Such marketing campaigns through virtual reality help insurers connect with their users in a market where most of the people don’t bother to engage with them due to lack of initiative. Also, insurance is an intangible product, the benefits of which can’t be seen in reality, and insurers can use this technology to virtually explain the benefits of their products to consumers.

Till now, the year 2016 appears to be a crucial year for Virtual Reality as Deloitte Global estimates a billion dollar sale for the emerging technology in terms of hardware and content. The market is expected to be flooded with multiple devices to make the technology a reality. Though the launch of Oculus Rift was most awaited, the industry is looking forward to experience other devices as well such as HTC Vive, Playstation VR, Sulon Q and Samsung Gear VR. And although VR would have applications in a varied array of industries in the long run, the major utilization would be in the Gaming sector this year.

That leaves a lot of scope for insurers to explore this technology and utilize the same to differentiate their offerings. Apart from Underwriting, Inspection Training, Driving Behavior, and Advertising, insurers can look into Risk Assessment for estimating risks in a property from a distant location, Analytics to scan through humongous sets of data for better decision making or something as simple as Heat-mapping to know where consumers are in need of insurance. When the capabilities of Analytics are combined with Virtual Reality, insurers would be able to accelerate the speed of claims assessment & processing as well as identify fraudulent claims.

Virtual Reality can also be used for product demonstrations, engaging with customers or merely for a better customer experience. Wouldn’t commercial building owners be able to understand the importance of insurance better if the whole scene of a Hurricane or Tsunami runs in front of their eyes and shows them the collateral damage?!

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