How Can Employee Benefits Insurers Profit in the Metaverse?

Mostly theoretical today, metaverse opportunities may have big impact tomorrow

The Automated Insurer | Digital Transformation

By Mike de Waal | 9 August 2022

Key Points

It’s unclear what kind of impact the much-hyped metaverse will have on the employee benefits industry. However, we can imagine a number of ways the metaverse can bring insurers closer to their clients and support a richer customer experience. These include:

  • Extended virtual health offerings
  • Personalized experiences based on metaverse avatars
  • More immersive gamification opportunities
  • Voluntary benefits tailored to metaverse denizens

Using modern tools, employee benefits providers have taken massive leaps throughout the pandemic to better personalize their offerings and deliver additional value to plan members. But the work is not over.

Now the metaverse, a network of 3-D virtual worlds focused on strengthening social connections, is touted as a solution to many of the workplace woes that have characterized the pandemic era. (Zoom fatigue, anyone?) Metaverse evangelists claim that deeper interactions with technology through virtual and augmented reality will have a transformational impact on distributed workforces.

Insurers – already stretched thin by the demands of digital transformation – are wondering if investment in this new tech will pay off.

While still largely theoretical, there could be several ways group and voluntary benefits providers could further capitalize on existing trends using this emerging technology. Let’s speculate!

Is the metaverse mostly hype?

Metaverse hype exploded following Mark Zuckerberg’s highly-publicized announcement in October 2021 that Facebook’s name would change to Meta and the company’s strategic direction would shift to building out the metaverse.

However, the concept of a virtual 3-D space where people meet, play games, and conduct business using virtual and augmented reality devices goes much further back. The term “metaverse” actually emerged in the early ‘90s, and Meta is by no means the only major player in the space. Tech giants Google, Apple, and Microsoft have all invested heavily in metaverse development, with foundational research going back several years. Virtual properties are being snatched up for tens of millions of dollars.

Certainly, the metaverse has no shortage of skeptics, and for good reason. The hype has often been over the top. But there is something there. Savvy financial services giants like JP Morgan and American Express have already claimed expensive digital real estate in the metaverse.

There is serious movement in this space that should not be dismissed by insurers–even if the VR headsets do look a little silly.

Extending virtual health offerings

Since the pandemic, health insurers have experienced increased demand for virtual health and wellness services, such as telemedicine. By delivering these services through the metaverse, insurers could capitalize on trends while offering a more immersive experience.

Several technology providers, like XRHealth, already offer metaverse-based virtual telemedicine services that user avatars can access at any time of the day.

Remote workers could also participate in mixed reality wellness programs and fitness classes alongside their colleagues. This can promote healthy living and build rapport among distributed workforces.

Life and health insurers could integrate metaverse services into their benefits. Insureds would then interact more closely with the carrier’s brand.

Avatars and gamification offer richer experiences

Carriers are already deploying AI-based technologies like digital assistants to deliver timely and contextual customer service and coaching. The metaverse presents an opportunity to extend these existing capabilities by connecting with a user’s avatar.

Avatars represent an individual’s entire digital identity in a far richer way than we’ve seen previously. As people conduct more “in-person” activities using avatars, insurers will have more data than ever to develop personalization strategies.

Carriers can leverage metaverse gamification to deliver rich experiences. For example, Cigna partnered with Microsoft to create a mixed reality digital health tool called the “BioBall.” The ball is a handheld, electronic orb that works with a virtual reality headset to navigate users through an interactive game while collecting their health metrics and flagging potential risks.

That’s a little more exciting than an online form!

Voluntary benefits tailored to the metaverse

Depending on how ubiquitous metaverse technology becomes, underwriters may very soon have troves of new data at their fingertips to more accurately and more quickly evaluate a plan member’s risk.

Using digital enrollment platforms, sales teams can recommend additional voluntary coverage based on a plan member’s activity level and other data points tied to their user avatar. This data may not be available through more traditional methods.

Additionally, popular voluntary benefits like identity theft protection will have a more important role to play in the metaverse. When a plan member’s identity can be tied to his or her digital avatar, that may create a bigger risk of identity theft.

New voluntary products tailored to distributed workforces “residing” in the metaverse may be commonplace in the next five years.

Responding to real-world metaverse-related health risks

As plan members increase their usage of metaverse technology, they may be increasing their exposure to additional real-world risks. Metaverse distraction could be dangerous.

Some insurers are already responding. Seguro GO is an insurance policy designed to protect Pokémon GO players from accidents, thefts, and injuries that may occur while players interact with the popular augmented-reality game.

Lengthy interactions within the metaverse may expose insureds to chronic health conditions tied to a sedentary lifestyle. With tools like digital coaches, insurers can establish a positive foothold in the metaverse and improve plan members’ physical wellbeing.

Insurers should also consider the mental-health risks users are exposing themselves to by protracted stays in the virtual world. We saw firsthand the mental health crisis that unfolded during the pandemic as screen time went through the roof. Will the metaverse really be any better?

Life and health insurers should pay close attention to how users interact with the metaverse and design wellness products and programs that encourage healthy digital habits, perhaps by leaning into the metaverse itself.

Will the metaverse disrupt employee benefits?

Inevitably, new insurtechs will exploit the metaverse, posing potential risks (and partnership opportunities) to more established players. At present, there is no way of knowing whether they will be successful in disrupting the industry or not, or even if the metaverse itself will be a success in the long run. Today, we are just speculating.

The metaverse could have significant implications for traditional benefits distribution models. As carriers deploy customer-engagement strategies across the metaverse, it is likely that direct-to-consumer sales will increase further than it already has in recent years due to the more immersive brand experience offered within metaverse applications.

The metaverse won’t disrupt the fundamentals of the insurance business, but it will almost certainly change the relationship between insurers and insureds. As the technology matures, benefits carriers can offer more robust digital coaching, personalized benefits selection, collaborative digital wellness programs, and new products to meet the coverage demands of metaverse denizens.

Artificial reality, AI, gamification and other elements of the metaverse aren’t new. Whether you call it the metaverse or not, technology is changing rapidly, and it’s hard to predict where it will take us.  Leaders of benefits insurers must help their companies stay on top of trends and positioned to take advantage of the metaverse and evolving tech.

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Mike de Waal

Mike de Waal is president and founder of Global IQX, an Ottawa-based software provider of AI-driven sales and service solutions to employee benefits insurers.  He has deep experience in both software development and business management skills. Early in his career, he worked as a computer programmer and then went on to become a financial planner and a benefits consultant with giant Manulife Financial before becoming a tech entrepreneur.  He can be reached at [email protected].