Augmented and virtual reality to create US$20bn risk by 2020
Written by Deborah Ritchie
Augmented and virtual reality technologies are creating a new dimension of risk and insurers should do more to keep up with these developments and seize opportunities, according to a new report out today.
As these technologies evolve companies using them will need insurance for accidents, business reputation damage or enhanced data security cover. Whilst insurers are unlikely to cover the entirety of this US$20bn risk, there is a huge new market at stake, and with few insurers currently following AR and VR developments, there is significant potential for others to enter this promising space.
AR and VR technologies are anticipated to generate potential losses to the value of US$20bn by 2020. Consumers will increasingly suffer accidents whilst playing AR games and companies will increasingly become responsible for securely storing ever more sensitive information, such as location data.
Insurance partner at KPMG’s global strategy group, Paul Merrey, says there are a number of obvious risks associated with AR and VR technologies which aren’t currently covered by insurers. Pokémon Go, he says for example, was a huge success but there were reports of some serious personal accidents, in California two distracted gamers fell around 50ft off a cliff. “Whilst some insurers are already looking at this market, there remains work to be done to understand the full extent of the potential risks and applications.
“The uses of augmented and virtual reality are only beginning to be understood. It has potential well beyond gaming - it could actually revolutionise how insurers run their own businesses. Imagine a world where an oil rig risk assessment could be done through virtual reality goggles with an oil rig worker on the ground and the insurer at his desk in London.”