Library: Abeam – Metaverse and operation: Life insurance

Executive summary :

The term “metaverse” has been making the rounds. Organisations and individuals are trying to define the “metaverse”.

What will the metaverse mean for the insurance industry? 

In this Insight, we define the metaverse as “a world in which people operate in an online virtual space,” and discuss the future of insurance operation and the possibilities for the time when the metaverse becomes commonplace.

1) Seamless world

Mr C, an eSoccer player, puts on a headset. Then, he walks into a virtual hospital in the metaverse space to receive online medical care.

Doctor: How are you doing?
Player C: I’m much better now, thanks to you.
Doctor: You’re certainly looking much better. You should take some medication for few more days. I will prescribe some medicine for you.
Player C: Thank you very much.
Mr. C logged out of the metaverse. The next day, he picked up his medication at home and looked at the transaction history of his wallet on the metaverse.
Player C: I see. The insurance covered the medical fees for the last time I went to the metaverse hospital. I wasn’t aware of it. It always settled automatically. But come to think of it, what did my insurance policy cover?
Player C put on the headset and headed to the metaverse sales department of the insurance company.
Player C: 「Hi, could I ask someone about my insurance policy?」
Service rep E: Yes, of course. What would you like to know?
Mr. E speaks English, while Mr. C speaks Japanese. However, they can communicate in their native language, thanks to the simultaneous interpretation function of the metaverse sales department.
Player C: It’s not a big deal. I saw the benefits automatically covering my medical fees, and wondered what my policy actually covers and how long it is valid for.
Service rep E: For example, your insurance policy covered the medical fee for hospital visit the last time you went to the hospital to treat the illness that caused your recent hospitalisation. The policy term is until August 20XX, and you can check your policy details from Mr. C’s wallet this way.
Showing a display, Mr. E explained how to inquire about the policy details from the wallet.
Player C: I see. Thank you.
Service Rep E: No problem! By the way, though it’s unrelated to your insurance policy, I need to tell you something. I’m a big fan of your team.

2) Challenges of insurance operation

This story is entirely fantasy. However, the insurance and healthcare industries will need to be prepared to transform to realise this fantasy. Such a future may come in the next decade or two. There are three challenges insurance operation need to overcome to be a front runner of the transformation. The three key points are as follows, each of which is to discuss in detail

1. Maintaining data quality
2. Standardisation
3. Service level improvement

1) Maintaining data quality

The insurance industry has tried to reduce the steps in the operation such as data reentry or processing to avoid jeopardising data quality. For example, a shift to paperless is one way to reduce such risk, and the paperless system in the new business acquisition area has made considerable progress. Even in the policy maintenance area, it is possible to inquire about policy details and perform transfer procedures via the Web and smartphones. For example, policy holder can take photo of medical fee bills and sent it using smartphones in the claims payment area.
In the above fantasy, the level of data linkage is even higher: from the time the policyholder visits a medical institution until the benefits are paid, no data entry or processing occurs for either the policyholder or the insurance company. The assumption here is such that all data necessary for the operation is automatically sent to the insurance company, without the policyholder having to enter information on their smartphone or take photo to send the required documents. In reality, achieving this level of data linkage is nearly impossible under current environment, as it is challenging to eliminate all paper documents and data that need additional manual input.

2) Standardisation

Standardisation is also an essential theme in insurance operation. For example, suppose business operations’ inputs, processes, and outputs are standardised. In that case, there will be more room for batch processing using a system, allowing for more efficient administrative processing, regardless of the type of product or procedure.
However, the hurdle to standardisation is high for operations involving multiple companies and organisations. For example, the collaboration with medical institutions discussed in the story above is an industrywide transformational idea that has probably thought about at least once. Still, in reality, this view is quite challenging to realise. For example, each insurance company and each medical institution has their own format and operations for claim and medical certificates. Standardising them would require leadership that transcends companies and organizations. In addition, the reality is that insurance companies incur certain costs to check for omissions and errors that may arise from the involvement of various entities and passing through non-unified formats and processes.

3) Service level improvement

One of the trends among insurance companies is the idea that insurance operation, which is often viewed as a cost centre, can be a source of customer satisfaction and an opportunity to create new customer contact points.

Currently, the sales and administrative functions of insurance companies are separated. Salespersons are primarily responsible for contacting customers, understanding their needs, making proposals, and closing. At the same time, administrative persons handle the process after the closing.
However, life insurance has limited point of contacts with customers after policy has been signed, and there are few opportunities for customers to perceive the attractiveness of products and services. Therefore, there is a movement to increase customer engagement by being aware of service levels even in events that do not occur frequently, such as maintenance and claims payment procedures.

In the fantasy above, a service representative with the same interest, ‘soccer’ is automatically assigned to a customer through a routing function based on preference, and a simultaneous interpretation function is set up so that a service representative can immediately respond to a customer whose native language is different from their own. This represents the ideal of customer service, providing the best response in real time based not only on the attributes of the customer, but also on their interests and preferences.

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