Virtual and augmented reality are generating steam as companies design and develop innovative products and offer new immersive experiences. According to the Digi-Capital report, VR and AR combined will generate $120 billion in revenue by 2020 (80% from the sale of AR devices and services, and 20% from VR hardware devices and gaming). Therefore, businesses in many industries adopt these technologies to gain a competitive advantage. Insurers are also exploring the possibilities of VR and AR technologies. Insurtech companies cooperate with VR and AR developers to create innovative solutions that would help them project real life situations, identify damages and potential risks, train agents and even more.
Expected augmented and virtual reality timeline
Source: Report by KPMG International
What can VR and AR offer insurtech developers?
Nowadays, VR headsets and consoles provide a near-realistic, interactive experience where you can feel inside the reconstructed world. This interactive 3D VR creates a system of enhanced visualization to provide an immersive virtual environment. For example, the use of omni-directional treadmills which allow users to explore VR world while being stationary in the real world are becoming more and more popular. The immersive experience that VR offers is able to capture anyone’s attention on a very deep level since it feels like a real-life situation.
AR and VR provide more than extraordinary experience and engagement opportunities. They present great practical value to the user. You can use virtual 3D models to review the product design and specifications and overlay technical information on them. The virtual 3D models get thoroughly tested for defects before real prototypes are constructed. As a result, companies create AR and VR environments to visualize the end-to-end production process in order to detect and mitigate any possible risks.
The need for precision and safety in service and repair operations is high. AR applications can overlay information with instructions to help anyone effectively engage in service and repair. With the help of AR, specialists provide remote guidance to assessors who are in the field to check and repair machinery. They can take notes through voice commands, or review checklists and manuals through gesture controls. This improves productivity, reduces costs, and ensures optimal usage of expert time.
AR and VR can also enhance user engagement and content delivery. For example, smartphone apps can now scan bar codes and QR codes of items in a retail store and augment these with product information and compare prices. Tracking and navigation systems can augment real-time information about road conditions, weather, traffic, potential hazards. Moreover, they can augment speed of oncoming traffic, signals, warnings, signboards, and obstructions on the vehicle’s windshield to ensure smooth and safe driving. In addition, VR can help claim adjusters understand the technicalities of car systems for different purposes and models. Simulated driving tests can give insurers a possibility to understand a person’s driving skills, which in turn would help them design a customized policy adjusted to individual needs.
Potential use cases of VR and AR in Insurtech
Marketing and Sales
AR and VR have opened up new possibilities, allowing insurers to use these technologies to project life situations and showcase value to customers in a new way. AR- and VR- based applications can help insurers illustrate various life and health coverage plans. Furthermore, they can visualize the need to save for retirement, simplify pension planning and family protection, etc. In order to build brand awareness and improve market penetration, insurers use AR and VR on web portals and smartphone apps. For example, an AR app can make live newsprint advertisements in a 3D format. Alternatively, it can allow users to scan a QR or bar code to initiate virtual simulations. This can improve customer loyalty, increase customer engagement, and act as a channel to cross-sell and upsell new products.
During risk assessment process, AR can help assessors of risk gain access to the right information from a remote specialist. It also helps indicate the weak spots of risk which may need closer physical inspection. In order to make the inspection process less effort-consuming, the field risk assessor can use a HUD glass with AR to record instant notes during inspection.
In terms of property damage assessment, AR comes in handy when overlaying information and identifying damaged portions of the building during the physical inspection. With the help of drones, AR makes it possible for claims adjusters to measure the dimensions of the property for damage estimation remotely. Also, insurers can use the captured images to create 3D-image models. This helps the adjuster perform a 360-degree assessment without being physically present at the location. In auto claims adjudication, AR-based customer FNOL (First Notice of Loss) apps can help them understand the pre-loss condition by overlaying relevant templates on the damaged parts. Moreover, they can measure dimensions, assess the extent of damage, and estimate repair costs using image processing.
Education and Training
AR and VR is great for training agents, adjusters, or risk assessors and helping them develop the right skills at a lower cost through virtually-simulated environments. AR-based applications present an effective tool for training employees on internal processes and business functions. Their usage could not only reduce the dependency on experts but also lower the cost of enterprise administration. Moreover, these experiences might provide stronger influence on policyholders to improve safety and security awareness. Insurers may also use them for enhanced risk mitigation initiatives referring to home safety from fire, windstorm, theft, and other perils.
Insurtech companies that adopted VR and AR technologies
Allianz exploited the potential of immersive reality to emphasize the possibility of occurrence of home accidents. When users with a tablet enter a house designed by the insurer, all the possible hidden dangers are portrayed. For instance, the toaster starts to sparkle and smoke, the bathroom sink floods breaking the floor, the aquarium cracks and even more.
This Belgium insurance company used VR as a marketing tool for younger generation and created an AR game called Ingress. During its partnership with Google’s Niantic Labs, AXA real world retail agencies were added into the game. More than 20,000 retail agencies around the world became AXA branded in-game “portals” for interaction via their mobile devices in the real world. The game helps engage players with the AXA branded Portal locations, and portals around the world.
This Australian-based company launched a car crash simulation based on Oculus headset. It gives the users a possibility to feel what it’s like to be in a crash situation. In the simulation, people experience an accident sitting inside a real car which moves through a hydraulic system accompanied with the virtual movements. The main aim is to promote safe and careful behavior while driving.
This company offers retirement benefit plans to customers. With the help of AR, it brings fun into Retirement plans. Desjardins launched the AR app that unlocks people’s retirement goals with different choices. The physical print named “Penny Dollars” is distributed and Penny becomes “alive” when scanned via a smartphone.
Liverpool Victoria is a UK-based company with over 5 million consumers. It has set a benchmark in the insurance industry in terms of creativity. The company uses AR for bringing life into newspaper flyers.
When LV=flyers are scanned, a 3D house model appears on the screen. By tilting the phone, users can explore the house while listening to what they can insure in that house, a car, a pet etc.
Over the next few years, the presence of VR and AR in insurtech will grow significantly. Interactive customer experiences, product demos, and employee engagement are just a small part of possible applications of virtual reality in the insurance industry. VR and AR can improve customer loyalty, build brand awareness, ensure smooth and safe driving. Moreover, the technology can act as a channel for cross-selling new products and save costs. So, these innovative technologies continue revolutionizing the sector as insurtech solutions are becoming more and more advanced.