We ask Vikram Singh, our AVP, P&C Business Advisory Specialist for his views.
Vikram, can you provide a quick view on why XR is becoming a focus point?
The COVID 19 pandemic has turned the world upside down resulting in lockdowns and curfews. The impact of insurance is increasingly significant and highly disruptive due to operational processes. Today we are seeing augmented reality (AR) and virtual reality (VR), collectively known as Extended Reality (XR), increasingly leveraged to provide solutions that address current issues.
COVID 19 pandemic has brought a behavioral change in the mindset of both insurance carriers and their customers. AR & VR are emerging & revolutionary technologies that are making roads into conversations at all levels of technology leadership.
Both AR and VR have the potential to disrupt the way insurance carriers operate their business; this has come to the fore in the current situation where people are socially distanced but virtually close.
They are a distinct set of technologies that provide a more inclusive, visually rich channel that insurance companies can help businesses to deliver a better customer experience. When combined with real-time or “dynamic” personalization using complex event processing that delivers contextual and relevant information in a timely manner there is an exponential increase in decision making to solve a problem; an increasingly critical aspect of delivering a better, differentiated experience.
As stated, the COVID 19 pandemic has accelerated the use of XR in day to day operations. They allow insurance businesses to run and grow irrespective of the challenges posed by social distancing. They also have the potential to enable remote but personalized risk assessments in a cost-effective way that can help identify insurance coverage requirements, impact premiums, and ultimately result in reduced loss ratios. Firms have also started to model the impact of the pandemic and are using the findings along with AR and VR based solutions for marketing campaigns/sales pitches.
Can you give more insights into how XR is disrupting?
The current situation has changed the experience of customers, agents, brokers, underwriters, claim adjusters, etc. To address the challenges, insurance carriers are having to find new ways of operating their businesses; both AR & VR have the potential to play a significant part in this.
AR is helpful in predicting & mitigating risks either before they happen or as they happen for both while VR helps in preparing zero-risk models.
Insurers can use AR to help customers identify and avoid risk in real-time; to educate consumers and incentivize less risky behavior.
VR has the potential to simulate workplace environments, to highlight the risks and hazards that could be encountered resulting in a reduced number of claims.
Can you provide further examples where XR can be used?
There are already AR & VR use cases within the Insurance Industry e.g.:
- Australia's National Roads and Motorists' Association Insurance and the US's Liberty Mutual Insurance are using technology for car crash and breakdown simulations;
- Zurich Insurance is leveraging the technology to enhance staff training;
- AXA Insurance is using VR for advertising.
To sum up, how do you see this exciting technology developing?
The demand for virtual experience is growing for insurance carriers and their customers. Due to this there is an uplift in the investment and subsequent use of technology such as XR that focusses on the recreation of a real-world environment for use in communication, learning, transacting and consuming virtually.
XR merges the real and the virtual worlds to enable businesses to create hyper-personal experiences for employees, partners, and customers. The result will be a plethora of new computing experiences that drive increased productivity in the insurance industry resulting in improved effectiveness and exciting new business opportunities.
A combination of rising market awareness and technological sophistication is already in place and this is driving exponential growth in adoption rates. It is envisaged that AR and VR will be widely used to simulate military engagements, to redefine education experiences away from the classrooms, used to perform complex surgeries, and support the design of architectural objects.
The technology has already evolved from pilot projects with modest growth to sustainable business models, market maturity, and global availability. The technical aspects of AR and VR will merge into a mixed reality feature set, with AR maintaining a larger market share due to relevance to the core of its business activities such as risk assessments, underwriting, claims, etc.
- Novarica – Report on Augmented and Virtual Reality
- Gartner – Report on Exploring Augmented reality for business and consumer
- Forbes – Report on biggest virtual and augmented reality trends in 2020
- IIR – Impact of AR & VR on the insurance industry
About the Author
Vikram Singh is an AVP, P&C Business Advisory Specialist. He is a Business SME, bringing over 23 years of rich exposure in successfully executing and designing insurance solutions for various clients across the globe. His vast insurance domain expertise along with in-depth experience of a variety of insurance products has been instrumental in bringing quality, innovation, and earning client confidence in the project deliveries.