Augmented, virtual and mixed reality technologies are being increasingly used by businesses and will entail a variety of emerging risks that re/insurers can cover, while also allowing them to improve their own products and services, according to a new report by Lloyd’s.
Recent estimates suggest that at least 20% of large businesses will have adopted ‘new realities’ technologies by 2019, and future market size predictions range from $108 billion by 2020 to $1.3 trillion by 2035, Lloyd’s noted.
Most new realities technology is currently being developed for consumer markets (e.g. video games), but as applications become more widely adopted in the commercial sector, new risks to human health and data security will emerge.
KPMG anticipates that these risks could cost businesses around £20 billion annually, caused by things like injuries to customers or data breaches, and re/insurers may be able to develop new products and services to help businesses manage these risks.
However, re/insurers themselves could also adopt these technologies to help them develop new products and processes. For example by using augmented and mixed reality headsets to overlay new damage information over pre-damage images and verify property claims information.
Similarly, property and casualty (P&C) underwriters could use the new technology to examine assets without needing to be on site, while exposure managers could visualise models and scenarios and add emotional engagement to sales or marketing experiences.
Brokers could also analyse a client’s risk profile and needs in a virtual representation of their premises and use this information to create risk management strategies that can be applied to real-world assets.
Additionally, new realities technology could improve disaster response by allowing emergency teams to train in a realistic virtual world.
Lloyd’s recommended that re/insurers take advantage of these emerging technologies by working with software and hardware manufacturers to support the responsible development of new solutions and to understand future distribution channels.
Keeping up with new developments will also be key to ensuring that re/insurers fully understand the nature of emerging risks and their potential aggregation, and can price policies accordingly.
