Augmented and virtual reality poised to impact insurance industry: Novarica

Augmented and virtual reality each boast considerable potential for impact within the insurance industry, with implications spanning risk mitigation, improved efficiency and loss ratios and enhanced customer service, Novarica said in a new executive brief.

While their effect will be most impactful over time, augmented reality (AR) and virtual reality (VR) each have potential for consequences within the industry, the Boston, Mass.-based research and advisory firm said in a statement released on Monday. The executive brief, titled Augmented and Virtual Reality: Potential Use Cases for Insurers, outlines the current state of VR and AR, and likely possibilities for these technologies in the insurance industry.

Novarica reported that carriers “are adapting to these recent trends with strategies to approach the market with simplified product sets and the technological capabilities to enable and support a defined, flexible, and well-connected distribution.” Novarica’s clients include more than 100 property and casualty and life/annuity insurers. Its knowledge base covers trends, benchmarks, best practices, case studies, and vendor solutions.

“In an industry as risk averse as insurance, AR has the potential to predict risks either before they happen or as they happen, and VR presents an opportunity to prepare for and model risk in an essentially zero-risk environment,” said Keith Raymond, vice president of research and consulting at Novarica, in the statement. “Insurers should plan to monitor and engage with these technologies in the future.”

Among other topics, the report discusses personal and commercial risk mitigation; customer engagement and education; real-time claims adjuster and agent training; claims and underwriter education; worker training and rehabilitation; customer service; cost savings and improved loss ratios; better customer experience and insights; and operational efficiency.

Earlier this month, research and advisory company Gartner, Inc. reported that artificial intelligence, “transparently immersive experiences” and digital platforms were the three distinct megatrends that will enable businesses to survive and thrive in the digital economy over the next five to 10 years. Gartner said that transparently immersive experiences – or technology that “will continue to become more human-centric to the point where it will introduce transparency between people, business and things” – will result in a relationship that becomes “much more entwined as the evolution of technology becomes more adaptive, contextual and fluid within the workplace, at home and in interacting with businesses and other people. AR and VR are two examples of this technology.