Metaverse, Services and Products - Life Insurance | Insights

The term "metaverse" is making a buzz, and various organizations and individuals are trying to define it.
In this Insight, we define the Metaverse as "a world in which people operate in an online virtual space," and discuss insurance products and services of the future when the metaverse becomes commonplace.

* In the previously published Insight article, "Metaverse and Sales Activities - Life Insurance," we discussed insurance sales in the future when the metaverse becomes commonplace. So please take a look at this article as well.

1. The missing virtual bird

An e-soccer player B puts on a headset, heads to the virtual practice field in the metaverse space, and prepares for today's game.

Player B- "No virtual bird"
Player B is a famous e-soccer player. He always keeps the virtual bird on his shoulder, which is one reason for his popularity.

Player B - "The bird is supposed to return to the birdcage at a certain time, but where did it go? I have to go to the game soon. What's going on?"
The time was up. The player had no choice but to head to the virtual stadium. His teammate C was getting ready at the stadium ahead of him.

Teammate C - "Mr. B, thank you for your help today. No virtual bird today?"

Player B - "No bird. I went to the practice field today, but it was gone."

Teammate C - "Is that so? That's tough. Many supporters are looking forward to seeing that virtual bird.

Player B - "Yes, it is. Very troubled."
Then, waving his hand a little further away, service representative D from the insurance company came over.

Service Rep D - "Mr. B!"

Player B - "Hello, Mr. D. Thank you for the other day. What's up?"
Mr. D, a service rep, lifted the birdcage he was holding. Inside was Mr. B's virtual bird.

Service Rep D - "I found your virtual bird."

Player B - "Wow, thank you very much. I wonder how you did it? It's gone, and I was deep in distress."

Service Rep D - "Last night, our insured management system detected an anomaly with Mr. B's virtual bird. Tracking it down, we found that while taking one photo after another with Mr. B's fans, the virtual bird got exposed to data that caused a malfunction and contracted an electronic disease. Therefore it failed to return to the birdcage. So, based on Mr. B's insurance policy for his virtual bird, we spotted the location of the virtual bird, treated it for the electronic disease, and then took it into custody."

Player B - "I got. That was very helpful. Thank you."

Service Rep D - "You insured this virtual bird just last month. We are glad you had it insured."

2. What can happen in the metaverse

This is fiction, but it can happen in the metaverse. So let us consider what could happen in the metaverse in line with this fictional story. There are three issues to discuss in detail as follows.

What are virtual birds made of?
What do virtual birds do?
How are virtual birds protected?

1. What are virtual birds made of?
This virtual bird is made of AI.

On the metaverse, avatars move around and talk to each other. But basically, there are flesh-and-blood human beings wearing headsets in the real world behind the avatars. In this way, a human in the real world operating an avatar in the metaverse is considered a typical case. Still, there is a possible case where an avatar equipped with AI (AI agent) moves automatically without human operation (Figure 1).

In the aforementioned imaginary story, this virtual bird is the latter case, with built-in AI. Even after Mr. B logs out of the metaverse, the built-in AI allows the bird to move around by itself, returning to the birdcage at a fixed time. Furthermore, as it moves around, it is exposed to data that causes the AI to malfunction, and it is set to fail (suffer an electronic disease).

Figure 1: How to move an avatar

2. What do virtual birds do?
The question is not "What do virtual birds do?" but rather "What do we want them to do?" Virtual birds with built-in AI may be able to do various things. For example, a virtual bird can make a sound at a particular time and communicate with other avatars, but communication levels may vary.

In the fantasy story mentioned above, the virtual bird can leave the cage by itself and take a commemorative photo with Mr. B's fans. To further expand the fantasy, the virtual bird can provide fan service or take memorial pictures on behalf of Mr. B while he is away in the metaverse, and receive compensation in the currency of the virtual space (Figure 2).

Figure 2: AI agent use case (example)

3. How is the virtual bird protected?
This virtual bird is registered in the insurer's insured management system to detect abnormalities. Let us consider a specific method of abnormality detection.

With a program embedded in the virtual bird, the insured management system gives an alert when it detects unlikely data updates based on its usual movements. In more detail, we are embedding some virtual sensors in a virtual birdcage, practice field, stadium, etc., and alerting the insured management system when the sensor detects the passage of the virtual bird to be managed, and so on (Figure 3). Of course, this is also wholly imaginary but should be considered possible.

Figure 3: Avatar Anomaly Detection Method (Example)

3. Future insurance products and services

Thus, there are various possibilities of what can theoretically be thought of and done in the metaverse. However, at this point, typical consumers are not yet in a situation where they are in daily contact with the metaverse. Therefore, as in the previous fantasy story, there is unlikely demand for insurance related to AI agents in the metaverse space.
On the other hand, this fantasy story shows the future of insurance companies' products and services. The three key points are as follows, each of which will be discussed in detail.

From compensation to problem-solving
From application to detection
From financial support to digital servicing

1. From compensation to problem-solving
The model of insurance is to compensate for insured accidents with money. While benefits-in-kind are possible, curing a disease is outside the insurance company's scope, and the insurance company generally provides the money to make it happen.

In contrast to conventional insurance services, in the aforementioned imaginary story, the service is not the payment of money but the immediate solution to the problem. For example, suppose something happens to the insured virtual bird. In that case, the insurance policy is not to provide money to buy/refurbish the virtual bird again, but to treat the virtual bird's electronic illness (malfunction) and return it to its owner. Of course, this kind of thing would be pretty challenging in an actual world insurance policy. But, it is not considered impossible in the virtual space.

2. From application to detection
Currently, the trigger for insurance companies to pay claims is generally a request from the policyholder. However, depending on the nature of the claim, the procedure has become more convenient for policyholders, such as filing a claim via the Web or smartphone. In addition, there are some examples of parametric insurance. But in general, the process for insurance policies is to receive a request from the policyholder, assess it, and pay it.

In the aforementioned imaginary story, however, there is no application from Mr. B, the policyholder. Instead, the insurance company first detects the abnormality of the virtual bird, protects it without any steps similar to an assessment, and delivers it to Mr. B. In a virtual space where programs can be easily embedded in places and objects; it may become commonplace for insurance companies to digitally detect anomalies and trigger the compensation process in this way.

3. From financial support to digital servicing
Digital power is indispensable to realize services such as in the above "1. From compensation to problem-solving" and "2. From application to detection". For instance, such services detect the disappearance of a virtual bird, treat the electronic disease (malfunction), and then return the bird to Mr. B. Therefore, the technological capability is necessary to embed a digital mechanism in the virtual space to make such a service possible.

And let's consider the provision of such digital services by insurance companies. We can assume that IT and digital technology will become more critical as one of the capabilities insurance companies should have, even though there are various ways to have the resources. In an extreme sense, we may see a future in which insurance companies become digital servicers rather than financial institutions.

More attentions and expectations are observed around the Metaverse currently, but values and transformation to be created there needs to be discussed further.
We, ABeam Consulting has launched our internal team for the Metaverse and initiated discussion with our clients and the Metaverse related consortiums to capture and leverage the trends properly and lead to meaningful social changes. We will deepen discussion further to co-create valuable businesses with various companies and groups.

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