Augmented And Virtual Reality's Immersive Disruption: Revolutionizing The Insurance Industry

Augmented Reality (AR) and Virtual Reality (VR) are expected to become multi-billion-dollar industries very soon, and the insurance sector is one of the last to explore and adopt these technologies. However, the pandemic has accelerated the use of AR and VR in the insurance industry, as they enable remote risk assessments in a cost-effective way and result in reduced loss ratios. AR and VR have also become a base for marketing campaigns and sales pitches, with over 85% of top managers in the insurance industry saying that these systems are crucial for reducing physical distance with customers and employees.

AR and VR can be used to simulate workplace environments, train teams, and gather information more efficiently. They can also be used for virtual offices and branches, enhancing customer service and boosting education. AR can be used to estimate damage for clients and support real-time decision-making, while also providing a more interactive user experience.

The risks associated with AR and VR also present a significant opportunity for the insurance industry. As these technologies become more widely adopted, new regulatory measures and insurance solutions will be required to mitigate the risks.

Augmented reality can be used to warn clients about potential dangers

Augmented reality (AR) is a powerful tool that can be leveraged by insurance companies in numerous ways, one of which is to warn clients about potential dangers. By utilising AR, insurers can enhance their clients' awareness of various hazards they may encounter in their daily lives, ultimately reducing the likelihood of accidents and mitigating potential risks.

Allianz, a well-known insurance company based in the UK, has successfully implemented AR to increase customer awareness of potential dangers within their homes. Through their innovative use of AR, Allianz has created an immersive experience where customers can visit a virtual house and identify possible incidents or hazards. By enabling the camera on their mobile devices, customers can see hidden dangers, such as a smoking toaster, a flooded bathroom, or a cracking aquarium, displayed on their screens. This interactive approach not only educates clients about potential risks but also encourages them to take proactive measures to ensure their safety.

In addition to residential risks, AR can also be employed to warn clients about dangers they may encounter outdoors or while engaging in specific activities. For example, tracking and navigation systems augmented with real-time data can provide valuable information about potential hazards on the road, such as other vehicles' speed, signboards, weather conditions, or traffic congestion. This technology ensures safer driving experiences and assists insurers in reducing claim compensations.

Furthermore, AR can be utilised to educate clients about risks associated with their hobbies or leisure activities. For instance, the popularity of the augmented reality game Pokémon GO led to a Mexican insurance company, Jiro y Asociados Seguros, offering a unique policy called Seguro GO, specifically designed to protect players from accidents or injuries while playing the game. This policy addresses the risks associated with being distracted by the game and ensures players are covered in case of any mishaps.

The use of AR to warn clients about potential dangers not only enhances their safety but also benefits insurance companies by reducing the number of claims and compensations. By providing clients with interactive and immersive experiences, insurers can encourage safer behaviours and promote risk awareness. This proactive approach to risk management demonstrates how AR is revolutionising the insurance industry and improving customer engagement and satisfaction.

AR can help insurers estimate damage and repair costs

AR can be used to estimate damage and repair costs by adjusters, who can use it to determine the extent of damage to various objects and provide a 360-degree assessment. This is done by using photos of the damage and building 3D models from them. Technical specialists can then overlay images of the object before and after the incident, allowing them to understand the damage volume and calculate the required repair costs.

AR can also be used for inspection apps, where digital building plans and the installation of sensors on a damaged building can allow insurance inspectors to accurately review all damaged parts of a building. Using AR-enabled solutions, inspectors can see behind walls to determine the location of a gas line or fire epicentre.

AR can also be used to improve the speed of the entire process. Policyholders can use AR applications to send their insurance claims in real-time, and the entire process can be completed accurately through remote assistance without the need for physical presence at the site of damage.

AR can also be used to improve the accuracy of the estimation process. Using AR, adjusters can be sure that the claim details are accurate and not overestimated by a policyholder in order to get a larger payout.

Finally, AR can be used to reduce expenses. With AR, there is no need for physical visits to the site of damage, reducing travel costs.

AR can be used to simplify communication with policyholders

Augmented reality (AR) is a powerful tool that can revolutionise the insurance industry by enhancing customer interactions and streamlining internal processes. One of its key applications is simplifying communication with policyholders, making complex insurance plans more accessible and understandable. Here's how AR can be used to achieve this:

Explaining Insurance Plans:

AR integrations in smartphones allow insurers to create customised plans for clients, who can select their desired options through an app. This makes explaining insurance plans convenient and interactive. For instance, Desjardins Insurance, a Canada-based company, developed an AR app that provides video explanations of retirement plans when users choose specific options. This transforms a tedious process into an engaging and user-friendly experience.

Enhancing Customer Engagement:

AR enables insurers to provide policyholders with immersive and interactive experiences. For example, Allianz, a UK-based insurer, created an AR house that customers could explore with their mobile devices to identify potential home hazards. This innovative approach enhances customer engagement and awareness of risks.

Remote Training and Guidance:

AR technology offers remote training and guidance to both employees and customers. With AR glasses or headsets, users can access training materials and participate in immersive training environments, eliminating the need for physical classrooms and reducing training costs. Zurich Insurance, for instance, created an AR app for remote guidance and employee training, benefiting over 10,000 employees in 170 countries.

Damage Estimation and Remote Assistance:

AR facilitates remote damage estimation, enabling insurers to inspect damaged areas and estimate repair costs without physical visits. Policyholders can also use AR apps to send real-time insurance claims, reducing the need for on-site assessments. This improves customer service and speeds up the claims process.

Interactive Customer Service:

AR opens doors for futuristic virtual interactions between insurers and policyholders. Insurers can communicate with clients from remote locations, providing effective solutions without the need for physical meetings. This not only saves time and cost but also enhances customer satisfaction.

In conclusion, AR has the potential to transform how insurers interact with policyholders, making complex information more accessible and engaging. By leveraging AR technology, insurers can simplify communication, improve customer service, and create a more interactive and efficient insurance landscape.

AR can be used for remote training and guidance

AR technology allows trainers to create interactive and immersive learning environments, enhancing the training experience and improving knowledge retention. For example, AR can be used to simulate hazardous situations or complex tasks, such as equipment maintenance and repair, without the risks and costs associated with traditional hands-on training. This is particularly useful for industries like manufacturing, aviation, telecom, and healthcare, where trainees can practice and gain experience in a safe and controlled environment.

AR-based remote assistance combines the interactivity of AR with real-time voice or video calling capabilities, enabling trainers to connect with trainees from anywhere in the world and share information. This is especially beneficial for global organisations with multiple locations, as it provides access to subject matter experts (SMEs) who can assist with just-in-time support and long-term knowledge retention.

AR can also improve training efficiency and reduce costs. By providing on-demand instructions and manuals, AR can streamline the training process, reduce errors, and free up time for more experienced employees. Additionally, AR training can be customised to suit specific industry needs, making it a versatile tool for training frontline workers in diverse sectors.

Furthermore, AR training can enhance safety, especially in high-risk industries. By providing realistic simulations and step-by-step instructions, trainees can practice and gain confidence in a safe and controlled environment, reducing the chances of accidents and injuries.

Overall, AR technology has the potential to revolutionise training and guidance in the insurance industry, making it more engaging, accessible, and cost-effective.

AR can improve advertising campaigns and brand promotion

AR advertising campaigns can be a powerful tool for insurers to promote their brand and improve their advertising campaigns. Here are some ways in which AR can enhance advertising campaigns and brand promotion:

Interactive and Immersive Experiences

AR technology allows users to interact with advertisements in a way that traditional media cannot match. By adding digital elements to the user's surroundings, AR creates an immersive experience that captures their attention and increases engagement. This interactivity can lead to higher conversion rates and a better return on investment (ROI) for advertising campaigns.

Emotional Connection with Customers

The immersive nature of AR ads can lead to a deeper emotional connection between the brand and its customers. For example, Burger King's "Burn That Ad" campaign encouraged users to use their phones to burn a competitor's ad and reveal a free Whopper offer. This fun and interactive campaign resulted in a 54.1% increase in in-app purchases, demonstrating the power of AR to build brand loyalty and increase customer satisfaction.

Social Media Engagement

AR ads can drive traffic to social media channels and encourage users to share their experiences online. For instance, Liverpool Victoria (LV=) partnered with Blippar to create interactive newspaper flyers that came to life when scanned with a smartphone. This innovative approach to advertising generated buzz and encouraged users to share their AR experiences with others, leading to increased brand awareness.

Virtual Try-Ons and Product Visualisation

AR technology allows customers to virtually try on products such as clothing, accessories, and cosmetics. This enhances the customer experience by assuring them that the product they choose will look good on them and fit properly. It also reduces returns and improves customer satisfaction. AR product visualisation also enables users to test retail products by placing them in their environment, ensuring that the product fits their space and their needs.

Brand Awareness and Trust

AR advertising campaigns can effectively build brand awareness and trust among consumers. For example, AXA Insurance used the popular AR-enabled game Ingress to expand its brand awareness. By partnering with a game that has a multimillion audience, AXA was able to reach a wider audience and create a memorable brand experience.

Lead Generation and Conversion Rates

AR advertising campaigns have the potential to generate more leads and improve conversion rates. By offering personalised and engaging experiences, brands can increase web traffic and the number of leads. According to the Snap Consumer AR 2021 report, it is predicted that by 2025, nearly 75% of smartphone users will frequently consume AR content. This presents a significant opportunity for insurers to connect with their target audience and promote their brand.

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