How can insurance find its place in the Metaverse?

In our most recent interview, Business Leader chatted with Josh Hart, Chief Product and Technology Officer at insurtech company YuLife. He gave us a fascinating insight into the world of insurtech and the role the metaverse has to play in the industry.

What is your background and what were you doing before founding YuLife?

Josh Hart, YuLife

Josh Hart

I’m a serial entrepreneur and have set up numerous businesses across different tech verticals, from EdTech to Mobile. Most recently, I co-founded YuLife, one of the UK’s fastest-growing InsurTech startups, which most recently raised a £50M (~$70M) Series B last year. Prior to YuLife, I was a Co-founder of Chelsea Apps Factory, playing a key role in the development of the organisation, which consulted FTSE 250 companies and grew to well over 100 people, servicing customers such as Google, Standard Life and Waitrose.

Having created digital experiences used by millions, my mission is to make all digital interaction fun. I grew up as an avid gamer and from the moment I started working and entered the adult world, I realised that the ways in which technology was used to help us manage our lives were deficient. There was a real lack of fun and engaging ways to carry out administrative tasks like filing a tax return or managing a bank account.

What role does the metaverse have to play in the world of Insurtech?

The metaverse has great potential to play a transformative role in improving the appeal of insurance products. For example, the YuLife app is built like a game and is centred on the ‘Yuniverse’, a virtual world in which users can ‘level up’ through quests, duels and challenges to access new zones and boost their YuCoin count.

In this way, the idea of a virtual world in which every user has an avatar and competes with friends and colleagues goes a long way to make YuLife’s product appealing, especially for younger users and millennials. At the same time, it’s important to remember that this success relies on the interlinking of the digital and physical worlds. Using the metaverse to inspire positive behavioural change needs to have some impact on people’s real-life wellbeing in order to be relevant.

What other potential applications are there for the metaverse?

The metaverse can enrich every part of our lives, but the focus has to be on enhancing our wellbeing in the real world, rather than escapism. In the era of Web 3.0, the metaverse is set to be a key part of a new, decentralized online experience – transforming our lives in the same way that social media has done over the past couple of decades.

Beyond the financial sector, the metaverse can impact businesses of all types. In the world of retail, a virtual reality-based overlay can significantly enhance a shopper’s in-store experience, providing customers with real-time information about the products they are looking at. Individuals can now acquire augmented reality NFTs, and we’ve recently seen through Nike’s acquisition of RTFKT that clothing and sportswear are among the next frontiers for ultra-personalized products.

Has technology always played an important role in the world of insurance?

For many strands of the insurance industry, technology and innovation are all-too-recent trends, which is why there’s been a lot of stagnation across the sector. When we founded YuLife, we focused on life insurance because we realized that centuries had gone by without any significant innovation in the life insurance market. For years, life insurance had simply been death coverage; we wanted life insurance to focus on life, and harnessing the latest technologies – AI, app development and the metaverse – was inevitably going to be key in realising that goal.

It’s no coincidence that insurtech startups are one of the hottest verticals in tech right now. The need to innovate is vast and the demand for insurance is high, and technology can underpin a range of new functions that insurers see a need to adopt, such as dynamically underwriting policies based on smartly-processed customer data. The use of technology in insurance is on the rise and I expect to see that trend continue for years to come.

What trends and you currently seeing within the Insurtech industry?

We are currently witnessing a significant push towards more intelligent underwriting. Today’s insurers are able to amass vast amounts of data about policyholders and their habits and behaviours, which can be leveraged to obtain greater insight as to the risk of an individual/group on an ongoing basis. Harnessing these big data sets will enable insurers to better negotiate with reinsurers and reflect risk more accurately. This new form of dynamic and intelligent underwriting has been discussed for years, but its applications are now finally coming to fruition.

Customer-centric user experience is another central focus, and has been for a number of years. Incumbents are increasingly investing in developing SaaS products in order to match the pace set by insurtech startups. The role of insurtechs in their relationship with incumbents is not about dismissing what’s already there, but leveraging it. I think more companies will begin to leverage existing legacy insurers to a greater extent, as respect for their ability to handle claims and manage large balance sheets from an actuarial perspective is incredibly strong. The disruption is about transforming the roles of existing players rather than outright replacing them.

What future trends do you expect to see in the industry?

Firstly, I hope to see more reinsurers look towards new forms of data to a greater extent when trying to model out their liabilities. The potential these data sets hold is limitless and data can be used to develop better, more engaging and more personalized products.

Second, we’ll see stronger incentivization to see individuals de-risk themselves, proactively taking steps to reduce their risk to their insurer (and also benefiting from a healthier lifestyle as part of the process).

Third, engaging digital experiences will become the norm. Major insurers are redeveloping their offerings and this will lead to big improvements in digital accessibility. Think of the difference in how high-street banks functioned before and after it became the norm to offer a banking app. Once it becomes expected that functions can be carried out at the swipe of a smartphone screen, there will be no way back.

Finally, more and more insurance products will directly target the user, rather than targeting brokers. It’s imperative to secure user buy-in and, like all financial products, insurers’ offerings will have to engage policyholders on a day-to-day basis in order to be considered desirable.

What does the future of YuLife look like?

YuLife is headed for a period of expansion and growth. In the group life insurance market, we’re also equipping workplaces with a way to show compassion and care for their employees in the era of the ‘Great Resignation’. Offering employees benefits with lasting value is going to be vital in helping businesses retain talent in an increasingly employee-centric hiring market.