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 Life Insurers: Forget about automation, are you metaverse ready?

Article

The life insurance industry is being held back by legacy back-office systems, the inability to access data in real-time, automation gaps in critical processes, and too much paper still clogging the channel. Even in the middle of their digital transformations, many life insurers are still behind the development curve when it comes to meeting consumers’ current expectations around digital sales and service experiences.

And now here comes the metaverse‒ the online environments that will enable more immersive human interaction using video, augmented reality, and virtual reality inside a digital environment. It’s an entirely new landscape that will completely revolutionize how we relate to each other, how we learn, express ourselves, and interact with the services that address our evolving needs.

Companies in other industries have already started developing and implementing future-focused strategies for succeeding in the metaverse. If the life industry is behind on digital CX already, then how will it manage the coming sea of changes?

To make sure companies in the life insurance industry can make that eventual leap, it’s essential that the first steps are taken today.

What could the metaverse mean for the life insurance industry?

As it is right now, the metaverse is still developing. To keep up with the improvements it will require, insurers will need to look beyond traditional processes, products, and services.

Below are some key opportunities the metaverse will open for the life insurance industry:

The metaverse will enhance customer engagement through the creation of immersive experiences

Immersive experiences in the metaverse are an opportunity for customers to gain a deeper understanding of the value of life insurance. Today, insurance advisors work to explain the significance of the product using data and experience‒the metaverse will equip them with a far greater ability to showcase the power of insurance. Think of traditional sales strategies that might be part of an advisor’s illustration of a policy‒but on steroids.

In a virtual space, insurance companies can create immersive experiences to help people understand the value of life insurance. For example, insurers could use simulations to show people the consequences of their choices, such as investing in a certain financial instrument instead of insuring their family. It would even be possible to illustrate the impact of illness and death on their loved ones‒and hence the need for protection. It’s important to note that social responsibility and ethics will be extremely significant in these scenarios. Insurers will need to carefully consider and develop guidelines for how they depict powerful renderings of emotional events.

The metaverse as a channel for product promotion

The current approach companies are taking includes creating a metaverse around their brand. This entails developing a user-driven, immersive digital experience to appeal to the more tech-savvy customer base. For life insurance, this could mean creating a space where customers can speak to advisors in a more face-to-face like environment. Advisors can meet clients in the metaverse and can provide added value content to clients through VR interactions with everyone from tax planners to heart specialists and lawyers. This will create a sense of trust and an element of human touch that is currently lacking in the experience. Additionally, it could mean introducing visually engaging ways to help prospects understand product features & trade-offs.

Insurance companies will also be able to use the metaverse as a venue to raise brand awareness. This is a more effective method of reaching younger generations, who are drawn to the gamification the metaverse provides. The absence of physical constraints will allow companies to experiment with different types of promotional techniques such as for example, place advertisements in mid-air.

In this world, a company’s brand becomes much more than what can be conveyed in traditional advertising. It becomes an actual world consumers can inhabit.

The metaverse will enable more customer engagement and touchpoints

The metaverse is a prime opportunity to drive more customer engagement. As it stands, the nature of the industry requires very few customer touchpoints. The metaverse is an opportunity to engage customers and prospects more frequently, providing better opportunities to upsell and helping keep the brand top of mind for when prospects are ready to buy.

There are many ways in which the metaverse will create more opportunity for engagement. For example, the current trend is for life insurers to offer wellness programs with the incentive of helping clients be healthier and live longer. The metaverse can be used in these programs to create immersive exercise programs or healthy lifestyle incentives. An augmented reality interface could provide nutrition, recipe ideas and diet plans while shopping for food‒integrated into an overall wellness plan that influences the size of the individuals’ insurance premium.

Additionally, augmented reality could be used to tag environmental risk factors‒potentially offering messaging and support for when users encounter something that their plan says they shouldn't do. This would help reinforce good habits and discourage bad ones that they are trying to quit.

The metaverse will enable more data collection and analysis

Every action in the metaversea will be a source of customer data. The ability to analyze an avatar’s activity, purchase history and relationships with others will enable insurers to offer more targeted products and better market their offerings. Additionally, the increased access to data will enable insurers to hyper-personalize products to an almost individual level, far more accurately assess risk and therefore create more accurate pricing‒ making the underwriting process instantaneous and more accurate.

The use of AI and AR together can be used to create digital models of life applicants that reflect reality. The data can then be used to predict mortality and more accurately dictate premiums. Additionally, the use of AR/VR in medical imaging can give underwriters more granular data about client health (making risk assessment better).

The metaverse will enhance workplace practices

The potential of AR and VR is great when it comes to training and communication. Advisors are one of the first people that customers call when faced with a death. Face-to-face training and immersive experiences can help advisors navigate the challenging conversations and ensure they feel prepared to support customers professionally, while still asking the right questions to validate and process the claim.

The face-to-face collaborative opportunities the metaverse presents could provide many benefits for life insurers. As a new venue for remote work and virtual offices, the metaverse supports flexible working styles and up-skilling. Being able to take-part in the metaverse will increase the probability of attracting young and bright talent to the industry. In fact, it may become a necessity.

What can life insurers do today to prepare for the metaverse tomorrow?

All stakeholders in the life insurance industry need to prepare the foundations today so they don’t miss out on tomorrow’s innovation. Data analysis is only going to get more intricate and CX expectations are going to continue to increase.

Do you have what you need to eventually scale so that you’re not building from scratch all at once?

To ensure that operations are compatible with the upcoming virtual reality, insurers will need to design a strategy for moving their operations to the virtual world. If you’re already 10 steps behind in your ability to access and utilize data, connect to internal and external solutions, and lack a reliable back-office system‒then you won’t be able to take advantage of the next level opportunities that are right around the corner.

Some key developments that can be made today that will facilitate a smoother transition when needed include:

  • Migrate to the cloud: Leave behind old server farms and all the attendant maintenance and costs. The cloud enables increased agility, accelerated innovation, and vastly improved scalability.
  • Embedded insurance: How can you sell your product as part of a larger offering? How do you get the consumer more involved and the advisor less involved? In a way, embedded insurance is a stepping stone to building holistic environments that contain insurance products and make purchasing seamless.
  • Create an omnichannel experience: Ensure that the CX you offer is consistently efficient across all channels, and that all channels have an open line of communication. If a prospective customer starts filling out an application on their laptop, can they continue where they left off on their tablet? In the metaverse, data needs to follow the consumer wherever they are.
  • Set up innovation incubators and make sure to include consumers in the development of new concepts‒particularly the youngest generations.

Conclusion

Simply put, insurers will want to modernize, automate, and streamline every step of the policy lifecycle. This strategy is already being pursued by many insurers, and those that adopt it first will gain a competitive advantage.

Now is the right time to consider what you will need to do to capitalize on the opportunities the metaverse will present. Evaluate your current IT environment and digital transformation plans.

What would you need to start doing in the next 12-24 months to prepare for an augmented future? What data structures, strategy and governance need to be developed? What technology is needed - in terms of back-office systems, digital sales and service solutions? What integrations will be required when your ecosystem is transformed into a metaverse? And what types of expertise should you be accumulating to make the most of that new world?

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