Augmented reality and virtual reality are opening up new opportunities for the insurance industry. Not only does VR provide a better risk profile for potential insureds, it also offers insurers a marketing tool for personalized coverage.

1. Insight
BEST’S REVIEW • SEPTEMBER 2017 • REPRINT 1
S
hortly after Nintendo’s Pokémon
GO burst onto the scene in
2016,insurers and agents
started paying close attention to both
augmented reality and virtual reality.
Virtual reality offers a digital
recreation of a real-life setting;
augmented reality delivers virtual
elements as an overlay to the real
world,according to Augment.com’s
blog article,“Virtual Reality vs.
Augmented Reality.”
AR and VR have started to impact
insurance as a way to improve existing
products and processes.Insurers,
such asTravelers,use VR in risk
management to reduce plant accidents
through a VR-based safety training
program.Other insurers rely on VR to
predetermine a driver’s competency.
Not only does VR provide a better risk
profile for potential insureds,it also
offers insurers a marketing tool for
personalized coverage.
AR is used even more broadly.For
instance,Allianz used AR to create a
home accident awareness application
for home buyers;the technology,
which blends virtual reality and real
life,is providing MetLife an interesting
way to showcase its dental insurance program
and Desjardins Insurance implemented AR in its
creation of a personalized retirement investment
education tool for prospective clients.
As AR/VR use grows,the pace of technology
is resulting in further integrations.Using a
combination of the two realities is the basis for
mixed reality,and a potentially more powerful
integration of mixed reality is already being seen
in next-generation drones.
Before AR, drones (unmanned
aerial systems) were primarily
recording vehicles that relied on the
use of photos or video streaming;
there was no way for users to interact
with what drones were showing
them.By adding AR to the mix,users
can now overlay data and digital
images onto a video,leading to use
cases in multiple settings.
The use of augmented reality in
drones allows insurers to:
• Manage risk.Drones can more
easily,more frequently and with less
risk capture the latest risk exposure of
insured properties and products.
• Quantify and streamline
settlements.Drones can facilitate
settlements by providing faster,more
comprehensive visibility to damages,
whether the damages are to physical
property,buildings or land.
• Provide additional
underwriting data. Drones can
provide more views and different
perspectives at any time.
When it comes to new insurance
products,theAR/VR/drone combination
introduces new capabilities in risk
definition and management.By
gathering more comprehensive underwriting data
and streamlining claims settlements,insurers can
now create insurable opportunities from where
there were none.Even drones themselves have
become insurable property.
AR/VR,mixed reality and drones are all evidence
of the continuing rapid pace of technology and the
integration of complementary technologies.Even
today,the business challenge facing insurers and
agents should not be whether to be more aggressive
with technology use but,instead,the focus should
be on how current and potential business models
are enabled by this technology set. BR
By
Gates
Ouimette
Not only does
VR provide a
better risk profile
for potential
insureds, it also
offers insurers a
marketing tool
for personalized
coverage.
Technology
A New Reality
Augmented reality and virtual reality are opening up new opportunities
for the insurance industry.
Best’s Review columnist Gates Ouimette is founder and principal
of ITconnecter. He can be reached at gateso@itconnecter.com.
BEST’S REVIEW
www.bestreview.com September 2017
Copyright © 2017 by A.M. Best Company, Inc. All Rights Reserved. Reprinted with Permission. www.ambest.com