Metaverse Use Cases in Insurance – Updated August 2022

Metaverse Use Cases in Insurance – Updated August 2022

Looking for metaverse use cases in insurance to explore? Well, metaverses are a great way to get your business ready for the future. Insurance helps you manage your risk, but they’re also a great way to manage your expenses and reduce the cost of unexpected financial losses. That’s why so many companies are using them in their insurance policies.

Metaverses are typically used by businesses with high-risk operations that need to be protected against financial losses and liability claims. They may also be used by small businesses with limited resources who want to protect themselves from litigation costs, or by large corporations that want to ensure that they’re not held liable for any potential damages caused by their products or services.

Why insurance in the Metaverse?

The Metaverse will essentially be an exact duplicate of the physical, analog universe. A virtual version of yourself that you control will be created as an avatar. Using a keyboard and monitor or a piece of high-tech 3-D visualization gear like the Oculus helmet, you can control your avatar.

The Metaverse also has its own set of laws and regulations. These laws are set up by the community within the Metaverse to ensure safety, fairness, and equal opportunities for everyone.

One of those laws is insurance. Insurance is a way for people to protect themselves against unforeseen circumstances that could put them at risk of financial loss or injury.

Insurance can be very beneficial in the Metaverse because it lets you purchase protection against accidents or losses related to your ownership of virtual property e.g., land ownership or currency. You can insure your character against theft, fire damage, natural disasters, or even terrorism.

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Isn’t the Metaverse just a 3-D game?

Until you truly think about what you can access and do, this may seem like a game. Do you wish to attend a live performance? A lot more famous people are following in the footsteps of Travis Scott, The Weeknd, and Ariana Grande who have already performed in virtual settings.

Would you like to enroll in a university course? Virtual classrooms are being built up by schools all over the world to accommodate students who are located everywhere. Do you want to go to a museum, train someone to fix a car or onboard new employees? Enter the Metaverse to discover countless possibilities.

Do people own properties already in the Metaverse?

The answer is yes!

The Metaverse makes it feasible to own property, which is very impossible in many big cities in the analog world. People are already purchasing homes in virtual communities and the metaverse residents are increasing in number by the day.

The mansion adjacent to Snoop Dogg’s in The Snoopverse, Dogg’s own Metaverse in the Sandbox Platform, was purchased for $450,000 earlier this year. The smallest parcel of property in Decentraland cost less than $1000 a year ago. That identical piece of property is now worth $13,000. The Metaverse real estate market is predicted to expand 31 percent over the following six years, and prices are rising.

These may sound unreal but these are the current happenings in the metaverse, convincingly the metaverse is gradually becoming the perfect place for businesses and investors right now.

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Apart from land, what can I own in the metaverse?

To many of us, we see the metaverse as a virtual or digital world where we can experience a different reality. A virtual space where we can live, acquire money, plots of land, businesses, companies, save, bank, shop, visit restaurants, play games, explore hobbies, build relationships and connect with an entirely different community of avatars. 

In the Metaverse, there are a lot of opportunities to purchase and sell products. Avatars will require clothing and vehicles. Furniture and fittings are required for properties. The same status insignia that people desire on earth will also be desired in the air. A Gucci purse just sold for $4000 and Gucci is even setting up a storefront in Sandbox.

What needs to be insured in the metaverse?

When people invest in assets, one thing comes to mind. How to recover in case of any emergencies. Living in the metaverse would be an extreme delight and no one after tasting what the metaverse feels like would want to come to a time where all they have acquired and built is lost.

Managing risks comes to mind at this point and this is what the insurance companies in the metaverse would cater to virtual lands, personal data, and businesses.

We can live freely in the metaverse, we can travel the world to see digital sights and explore the world differently. These activities are similar to activities that can be found in the real world and you would agree with me that in the real world, many of these need to be insured including life.

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What would insurance in the Metaverse be like?

The metaverse is currently the new big thing on the internet right now and individuals, businesses, and even the government are coming to awareness of this digital world. It is going to become more and more popular and when that happens, people will start looking for ways to protect their assets in this virtual world.

In the Metaverse, insurance would be a sort of “insurance pool” for all of your data. You’d have a record of your character’s data in the metaverse, including their skills, inventory, etc., and they’d have a record of their insurance claims.

The way it works is that you purchase insurance on yourself (or on your character) to cover any damages that may occur. This way if your character gets hacked while they’re playing in the metaverse, it will cost them money to fix it. It’s like having an auto insurance policy that covers cars crashing into buildings or people getting hit by trains while they’re online (but only if you pay extra).

This is meant more as an example than anything else, but it is interesting how this could work in practice. It would be fun if you could purchase different types of policies for different things – e.g., if you wanted to insure your character against dying from starvation or dehydration while using certain skills, etc.

But as the “new Metaverse fragrance” fades, we’ll have to accept that the assets we own, the wellbeing of our avatars, and the information that underpins everything will need to be safeguarded and our Metaverse lives will be valuable because of this.

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Metaverse use cases in insurance

Risk exists everywhere there is value. Insurance and managing risks are terms that exist simultaneously. The use cases below would help you relate more to this topic.

Personal data

Living in the metaverse involves some personalized data assigned to your own avatar and you don’t want to lose this in the event of unforeseen circumstances. Insuring personal data becomes a thing in this case and this would be an avenue for Insurance companies to also find their foot in providing value to the lives in the metaverse. This is a mutually beneficial instance.

Digital Assets

Did you know that just as you require a property to thrive in the real world, you’d also need to acquire assets to live in the metaverse, both personal and business. To occupy spaces in the metaverse, you’d be required to acquire those spaces, in the event that you do, this virtual land is allocated to you and you don’t want to lose it at any point.

Also, imagine a game where you’ve had to purchase a Bentley or a G-wagon, you don’t want to lose this without ensuring that the value is in one way restored.  

Risk control and mitigation

The insurance business will benefit from creating strategies to assist virtual residents in preventing danger in the first place because the hazards associated with operating in the Metaverse are currently mostly unknown or unforeseen.

Creating coverage that encourages inhabitants of the Metaverse to focus on activities that reduce risks rather than providing recompense for loss. This would be similar to the ops of anti-virus brands, how they remind us to protect our PCs ahead of time to prevent loss and damage.

Having in mind that the risks of living in the virtual world are not yet clear, it is crucial for Metaverse citizens to be aware of the dangers of living in a virtual environment.

The plan here is like a shared responsibility that by consciously avoiding activities that put your property at risk, you are also involved in how well your property is secured.

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Physical and Mental Harm

Although the potential damage to an avatar is not completely understood, since residents of the metaverse exist as “data entities” there is a chance that it might have some sort of “data injury.” People will require access to virtual health insurance to protect their virtual health as they devote more time and money to building their avatars.

Recall that living in the metaverse would mean an individual becomes more physically inactive as they’re seated on one couch most of the day with some disconnection from their immediate environment. In this case, it could be necessary to adjust conventional health insurance policies to include coverage for the actual physical and mental harm brought on by prolonged use of virtual reality computers and equipment, as well as by prolonged sitting still. 

Possible health dangers

We are aware of the health dangers related to lengthy periods of inactivity, and lengthy periods of screentime but as more individuals enter and remain in the Metaverse, obesity and musculoskeletal, optical, and cardiovascular disorders are expected to become increasingly serious health problems. In addition, isolation, and loneliness.

These are gaps to be filled by forward-thinking insurance companies who are able to foresee these situations and scale to solve these problems.

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Conclusion

Hope this article was able to show that there are many use cases for insurance and that they’re essential to providing the metaverse’s inhabitants with wonderful living conditions. People and businesses both have a role to play in resolving this issue, as it will include both sides.

With the right direction from insurance firms, which are equipped to provide goods and services in this area, security of lives and property may be attained. Lastly, we appreciate you reading this post all the way through. Did you learn anything new? If so, do leave a comment on what you think.

About Temitayo Olatunji

Avatar photoTemi is a Nurse and a tech-curious content writer currently exploring technical writing. When she’s not writing, she is completing a technical course somewhere on the internet.

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