The Metaverse: An Evolving Technology

The Metaverse: An Evolving Technology

Learn what risks are associated with adopting new technologies for your business.
Andrew Zarkowsky
Andrew Zarkowsky, Head of AI Underwriting, The Hartford
Michael Kearney
Michael Kearney, Vice President of Emerging Technology & Innovation, The Hartford
Although still in its infancy, there are many unknowns around the metaverse. Professionals at The Hartford believe it has the potential to change how businesses operate. The metaverse is exciting and intriguing, but it is important to consider what risks might be associated as this technology is integrated into the current ways of work.

What Is the Metaverse?

At its core, the metaverse is an immersive virtual world that is constantly learning and gathering data. “When people hear about the metaverse, they think goggles and playing games with your friends. While that is a big part, there is a lot more to it,” said Andrew Zarkowsky, global technology industry practice lead at The Hartford.
The metaverse offers us the opportunity to experience data in a 3-D fashion. It allows people to put themselves into a situation where they are experiencing the moment, rather than just watching it on a screen.It brings together the physical and the digital. The metaverse draws on a variety of technologies, including virtual reality platforms, gaming, machine learning, blockchain, 3-D graphics, digital currencies and some virtual reality (VR) headsets.2
While you can access the metaverse today with a computer, to participate in the full 3-D experience, you need to use an access point such as VR headsets or other immersive technology. Technology companies are also exploring virtual viewing windows, which would display computer images and holographic pods to project people and images into physical spaces at events or meetings.3

Does the Metaverse Already Exist?

While augmented and virtual reality are used to access and provide experiences in the metaverse, it is important to distinguish they are not the metaverse. “What is here today are the underlying capabilities that will enable the metaverse of the future. Virtual Reality for training is used today. We see companies exploring usage of digital humans. There is an escalation of sensor usage to monitor and collect data via Digital Twins,” said Michael Kearney, vice president of emerging technology and innovation at The Hartford. Two notable pieces of intelligent technology are augmented and virtual reality:

Augmented Reality

Augmented reality provides digital elements over real-world views, such as virtual tours of homes in real estate.Many companies have incorporated augmented reality into their products to make emotional connections with their customers. For example, Disney developed technology that turns coloring book characters 3-D as you’re drawing.The use of augmented reality allows the user to watch their drawings come to life, creating a more personalized experience.

Virtual Reality

In contrast, virtual reality provides immersive experiences that isolate the user from the real world, like a virtual museum tour from the comfort of your home.Many companies have incorporated virtual reality into their business plans to help create a unique experience they won’t have elsewhere. For example, Toms, the shoes and apparel company known for sending a pair of shoes to a person in need when a pair is purchased, installed virtual reality technology in their stores. This experience transports customers on an immersive ‘giving trip’ where they can see firsthand the impact that their purchase makes on others.7
Augmented and virtual reality are becoming popular in the retail space, but even beyond that, providing benefits to many different types of businesses.

Using the Metaverse for Business

The metaverse can change the way businesses work and operate. Businesses could use this technology for a range of purposes. For example, the metaverse could allow employees to gather in a digital office, regardless of where they’re located, giving them a collaborative space where teams can work. This technology could allow for more personalized employee training. Additionally, learning and training environments could be created that reduce physical training costs.8
Companies are exploring the use of augmented reality as a supplemental training resource. “I was at a conference where I had an opportunity to try on augmented reality glasses. I was asked if I had ever fixed a turbine before, which I have not. With these glasses, I was able to see normally, but there were also pop ups that gave guided instructions to fix this turbine. Even though I had never worked on a turbine before, I was able to complete that task with use of this technology,” said Zarkowsky. This technology creates an opportunity for employees to learn in a hands-on environment, with lower risk. “Not only is the person integral, but all of a sudden, the technology that’s being implemented to help that worker is extremely important as you think about how to maintain, fix or install a product,” said Zarkowsky.
While there are use cases for integrating augmented and virtual reality into physical work, companies can also consider exploring how this technology might help mitigate overall risk while planning.

The Use of Digital Twins

A digital twin is a digital model of an environment, product or system used for testing, integration and simulation. The use of this model allows you to test in the digital sphere without affecting the real-world counterpart. “In this new age, you have products being sold with a digital twin. You receive a physical version and a virtual, intangible product,” said Zarkowsky.
Having access to a digital model could provide new opportunities in the insurance industry. “It is important to explore digital twins because it could change the way we underwrite and manage risk in insurance. Imagine you can gain access to all data off a digital twin from design all the way through its potential demolition. We would know about that building from a risk perspective. This is far more information than we have today,” said Kearney. This technology could be utilized to create better quality products.

Blockchains and Non-Fungible Tokens (NFTs)

Businesses may have the ability to monetize the metaverse through blockchain technology, which is a digital public ledger. This network records transactions through a decentralized system. The blockchain infrastructure creates a fully secure online economic ecosystem within the metaverse to transfer data, currency and assets directly, without the need for a middleman.9

The metaverse also offers opportunity to create digital content where someone can pay for assets, such as photos or videos, also known as Non-Fungible Tokens (NFTs). These tokens prove ownership over an asset either in the physical or digital world.10
While NFTs are a new sense of trading, it is important to be aware of scams. As this technology is evolving daily, scammers adapt and find ways to replicate and fake assets that entice people to invest in their goods, but they never provide the item. It is important for investors to verify their assets as scammers are copying collectables and selling counterfeit NFTs.11
As scams increase, insurance companies are developing new forms of coverage that protect the inherent risks NFTs have.12 If your business is considering engaging with NFTs, it is important to consider there might be risk associated.

Emerging Risks To Be Aware of in the Metaverse

Though there have been major advances in the technology industry, it is important to remember the metaverse is relatively new and not yet fully understood. “My role is to understand the risk around the corner. This technology is always moving and evolving,” said Zarkowsky.
As we continue to explore the capabilities of the metaverse, there are some emerging risks that have become clear:
  • Data Integrity: It is important to be sure the information you are receiving is accurate and has been reviewed by trusted sources.
  • Identity Verification: Be sure you know all the details about a company, product or person you are working with digitally. As scams increase, it’s essential to have due diligence in who you conduct business with.
  • Know your capabilities: As technology becomes engrained in daily tasks, it’s important to have someone monitoring your digital components, ready to catch a mistake before it has a large effect on business.
  • Provide Transparency: If you are interacting with customers, it is crucial to provide the appropriate warnings and disclaimers on the technology. Customers should understand that while this technology is exciting, there are many unknowns that must be considered.

Insurance for the Metaverse

There is still a lot that is unfamiliar in the metaverse. Businesses and insurance companies have a lot to explore. It is important to be open to this new technology while also being cautious with implementation.
“In insurance, we have general liability that covers property damage and bodily injury. Then you have property coverage for physical damage. Then there’s cyber, which deals with intangible things. These three policies are separate. Now, we have a world where they are merging and as an industry, we need to figure that out,” said Zarkowsky.
The Hartford has one of the largest databases on workers’ compensation and group benefits claims. “An as insurer with 200 years of experience, it is important to utilize the large amount of data gathered and apply it to a relatively new field. You then need to identify where there are gaps and find other sources of data to help your clients mitigate that risk,” said Zarkowsky.
Overall, it is important to understand there is a lot to still be explored in the digital space. As you consider integrating new technology, be cautious and ensure all decisions are informed. This is the only way you can help protect your business from risks.
1, 4, 6 Forbes, “Metaverse 101: The Basics For Businesses”
2 Harvard Business Review, “How the Metaverse Could Change Work”
3, 8, 9  CBRE, “Ten things you need to know about the metaverse: The beginners guide”
5  Adobe Experience Cloud, “5 Innovation Examples Of Augmented Reality In Action”
7  Forbes, “10 Best Examples Of Augmented And Virtual Reality In Retail”
10, 11, 12  Forbes, “As NFT Scams Grown In Numbers, NFT Insurance Hits The Market”


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