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Today, we stand at the intersection of two groundbreaking technologies, Augmented Reality (AR) and Virtual Reality (VR), which are transforming how we perceive, navigate, and secure our future.

Imagine a world where insurance claims are assessed without ever stepping into a physical office, where risks are more accurately evaluated, and where customers fully understand their policies.

This is the future of insurance, driven by the advancements in VR and AR technologies.

Introduction to Virtual Reality & Augmented Reality

Virtual Reality (VR) places users within a digitally simulated environment. Depending on the device used, like the Sony PlayStation VR, users can immerse themselves in a virtual world, experiencing it through various senses such as sight, touch, and hearing.

VR headsets employ 3D stereoscopic projection to ensure complete immersion.

Augmented Reality (AR), on the other hand, overlays digital information onto the real world, enhancing users’ perception and interaction with their surroundings. AR can be accessed through devices like smartphones, tablets, and AR glasses, providing real-time data and visual enhancements.

AR gained mainstream popularity with the release of Pokémon Go, which became America’s highest-grossing game in 2016 and 2017 and achieved over 1 billion downloads worldwide.

Their impact across industries

For many years, Virtual Reality was primarily used in the entertainment industry, most commonly in games. However, with mixed reality devices like the Apple Vision Pro, which combine both AR and VR, more practical uses are being realized.

Today, diverse industries like aviation, medicine, and the military have practical applications for these technologies.

For instance, much of the training and onboarding for specialists and professionals in such sectors are conducted via simulators—virtual worlds—where trainees can experience real scenarios and situations, preparing them for real-world challenges.

In the insurance industry, we have only scratched the surface of exploring how these technologies can facilitate superior performance across multiple processes.

Advanced risk mitigation

Augmented Reality has developed sophisticated simulators that enhance risk mitigation strategies for both insurers and policyholders. Insurers can leverage these technologies to educate clients on reducing claim likelihood by demonstrating potential risks and preventive measures.

Asides that, these technologies enable the creation of comprehensive disaster management programs, allowing users to practice responses to various emergencies and thereby minimizing actual risks.

Expanding market reach

AR and VR revolutionize customer acquisition and retention by transcending traditional advertising methods. Virtual environments can simulate real-world risks, demonstrating the importance of insurance coverage in an engaging manner.

These enable insurers to reach a broader audience through interactive and immersive marketing campaigns, effectively conveying the benefits of their products and services.

Claims processing

The integration of AR in claims processing is poised to revolutionize the insurance sector by efficiency gains in speed and accuracy. Combined with the Internet of Things (IoT), these technologies can streamline the entire claims process.

AR enables insurers to assess damages virtually, facilitating quicker and more precise claims evaluations. This not only accelerates claim settlements but also enhances fraud detection capabilities, minimizing claim investigation costs.

Enhanced customer experience

Incorporating AR and VR into customer service promises significant improvements in communication and issue resolution.

Instead of traditional voice or video calls, Augmented Reality can allow company representatives to virtually be present with customers, offering a more immersive and interactive experience.

This approach enables representatives to better understand and address customer concerns, providing detailed insights and facilitating appropriate actions. The result is a higher level of customer service that enhances trust and satisfaction.

Real-life case studies

Liberty Mutual Insurance: Liberty Mutual uses car crash and breakdown simulations to educate and train both customers and staff. These simulations aim to improve preparedness and response times by offering realistic scenarios that replicate real-life incidents.

Allstate: Allstate employs virtual reality (VR) technology for training purposes, particularly for claim adjusters. VR provides immersive, realistic scenarios that allow adjusters to practice and refine their skills in a controlled environment.

USAA: USAA piloted an augmented reality (AR) app in 2018 that allows users to recognize cars on the street and access information about them in real time. The app, powered by Blippar’s car recognition technology, identifies the brand and model of any vehicle from the year 2000 onwards and provides details on purchase price, insurance costs, and similar vehicles for sale locally.

To summarize

The convergence of Augmented Reality (AR) and Virtual Reality (VR) marks a pivotal moment in the evolution of the insurance industry.

These technologies are not merely enhancing existing processes; they are fundamentally reshaping how insurers interact with customers, assess risks, and manage claims.