A recent article from Swiss Re on the current PokemonGo craze explores possible implications and opportunities for Insurers – the question is, will insurers respond in time to ride the wave of Pokemania?
Have you gotten the fever? Oh yes, the world has- as seen in all kinds of news headlines – from scary to weird. As PokémonGo is storming the world in ways we could not imagine, my brain is switched on – not as a gamer –but as an innovation manager. I’ve spent lots of time researching on InsurTech, disruptors’ overnight- success, technology impact on insurance, and applications of gamification and behavior economics (BE). I’ve seen some real-life examples, but nothing has reached the level of speed, sensation, scale, disruption, bad and good, … like the Pokémania.
This fever is HOT with record-shattering of 75 Mn downloads 3 weeks after its release. It has not only surpassed Twitter in number of users but also Facebook in terms of engagement (average time spent). The App makes US$1.6 Mn estimatedly every day. Nintendo shares skyrocketed up 53% five days after its launch, then doubled by the 2nd week and have plummeted now –though still well above the pre-GO level- after investors realized that Nintendo doesn’t actually make the game. For those unfamiliar, Pokémon Go is a free augmented-reality (AR) mobile game in which users visit real-life locations in hunting for tiny creatures called Pokémon that can be seen superimposed on smartphone screens overlaying on the real world. This craze seems to bring Bad & Good to insurers.
Soon after the game’s release, engrossed Pokémon hunters have fallen off cliffs, shotdead, crashed into trees while driving, or been run over while walking. Too absorbed in the game, players walk, bike, drive to insanely inappropriate places and show little regard to surroundings. Robbers were reported to place a lure at PokéStop to tempt victims. Individuals are exposed to identify theft while employers may be exposed to have their confidential and proprietary information hacked if employees play the game using company phones.
Too much addiction creates severe side-effects as the craze caused a spike in personal accidents, thefts, robberies, and crimes. There is no study yet on how much insurance claims have been made for damages and injuries related to the game, but clearly players could pose themselves to danger if they’re too absorbed in the game and forget the basic sense of decorum and safety. The risk of smartphone-obsessed pedestrians or drivers is definitely not new. We know that driving when texting is dangerous and walking while looking at phones can result in neck strain, sprains, and other serious, even fatal, injuries. PokémonGo only magnifies the risk into a new level. The game causes insurance headache. The headaches touch different lines of insurance, not only personal accidents, motor, life, theft/ burglary, and property insurance – but also cyber, security & liability insurance. Whether insurers would cover any of these injuries depends on the circumstances, but complication is likely to happen due to many controversial views.
For example, whether employers and landowners are ultimately liable for injuries of trespassers or employees who are playing the game on their properties is a question. It may depend on whether these Pokémon hotspots issue implied invitations to enter the premises (i.e- listed as PokéGyms/PokéStops) or have adequate notice of hazards. If a business opts to become PokéGyms or PokéStops to attract footage to its shops, do underwriters see this as an increase in liability risks or merely marketing & advertising activities? Insurers may have different views – though the point is not fundamentally different from a traditional situation: if a store owner attracts more people coming to his shop, does this increase his liability? If the property owner is held liable to injuries of trespassing Pokémon hunters, the property owner may seek indemnification from the game developer, Niantic. It is difficult to tell whether there will be lawsuits in spite of in-game warnings and disclaimers as there is very little court precedent.
I think the chaos that the game created is somewhat similar to that of Uber. We can’t say that Uber is bad just because of the assaults and rape incidents. In the early phase of any disruption, chaos happens due to unpredictable situations that societies, governments and even disruptors themselves take time to be aware of, to be able to adjust, control and govern. In fact, Niantic’s servers are struggling with the traffic as it didn’t prepare for this global sensation. By nature of a disruptor, PokémonGo brings insurers opportunities and great lessons to learn.
Insurers can leverage this phenomena to promote existing products, boost their brands, or showcase their innovation. Three basic insurance products for Pokémon hunters are homeowner, motor, and cyber insurance. Beyond those, there will be a demand for policies covering multiple jurisdiction (as it traverses territorial boundaries) or financial loss caused by negligence and breach of contract.
Sberbank Life in Russia was the first insurer to capitalise on PokémonGo marketing & branding opportunity. In addition to the typical way of installing PokéStops modules to lure players into its offices, Sherbank offer free insurance in the event of injury to PokémonGo players. Its statement positions the offering around its social responsibility to give the needed protection to the increasing gamer population and to raise financial literacy.
What gamification truly means!
For a long time, we’ve talked about using gamification and BE to shape behavior. A few insurers have tried for their wellness programs, but nothing reaches this level of addiction. PokémonGo may be the fastest growing unintentional health app and the most addictive exercise App ever developed with its amazing ability to get couch potatoes out walking, sometimes even for hours each day. Twitter feeds are packed with excited Pokémon hunters, with some even logging for more than 20 km a day. Before PokémonGo, there were some games that take users out for walking or running such as Zombies, Run! But Pokémon Go is uniquely addictive.
Perhaps its addiction is from the high dose of nostalgia interacting into the real-world thanks to AR and location-based technologies. It overlays virtual thrill on real-life adventures. It satisfies the desire to interact closely with fictional characters- the demand of parasocial interaction. PokémonGo and AR can potentially turn parasocial interaction into real social relationships– in which virtual characters become a source of social support, i.e. virtual buddies. Moreover, many other social aspects of the game greatly benefit users – as people find a purpose to leave the house, make friends when walking in the neighborhood looking for Pokémon, or discuss about the game on social media. This could do wonders to mental health. This could also become intrinsic rewards that can drive users’ excitement and engagement for longer periods than extrinsic rewards (like accumulated points or unlocking levels) can- because extrinsic rewards may lose their attraction over time when the novelty or the challenge of the game wears off.
To be fair, PokémonGo users may not be health conscious at all. But is that the role of BE/gamification to drive behavior in a good way? This game shows how BE could make users act rational (to exercise) unconsciously (of-course the side-effects of irrational behaviors described earlier need to be mitigated). Insurers can learn to bring gamification of fitness to another level. The game proves the possibility to turn something mundane or unjoyful (exercise for example) into powerful engagement.
Analytics & technology adoption
Like Fitbit, PokémonGo can be an interesting source of health & behavior data, in even much greater details: steps, locations, how users get there, and how long they stay. Hence insurers can look beyond fitness wearables when finding partnership for their wellness insurance. Location-based technology offers insurers opportunities to combine geolocation with consumer behavior data to personalize engagement and products. Pokémon Go proves AR technology can go mainstream to reach mass consumers. The true potential of AR lies beyond claims and marketing, as powerful engagement tools to shape insureds’ behavior in an innovative (and addictive) way. Another hit of AR may take more years but it may also happen overnight- just like Pokémon Go, causing disruption to insurers any time.
The insurance industry, in the midst of InsurTech invasion, can learn & find inspiration from the game. We see how such a technology phenomenon could stir up the risk landscapes, how fast technology adoption can be, and the true power of gamification (or how irrational people can be!). Is PokémonGo a devil or angel? Is it a fad? Surely it’s exciting to take a look and observe.