Insurance In The Metaverse: Protecting Assets In The Virtual World

By Suffescom Solutions

September 06, 2022

The majority of harm covered by current insurance policies results from unpredictable natural disaster like typhoons, earthquakes, and illnesses. On the other hand, as the metaverse is developed by humans, so insurance in the metaverse will cover human-made disasters which we will read in detail down the article.

Man-made risks that can occur in the metaverse

A digital universe is growing electronically, and various sectors like commerce, business, entertainment, healthcare, and education are transiting to this universe. People are doing day-to-day activities to socialize in the Metaverse world. People can travel to new places, hang out with friends, and eat anything without calorie issues. 

With these advancements, people also need to protect all the virtual properties, the health of digital avatars, and all the metaverse data. This is where we need metaverse insurance to protect our digital assets, measure risk, and provide the needed policy coverage. 

Suffescom Solutions Inc. provides a decentralized insurance platform development for business owners to create a security-rich platform. We equip the best technologies for metaverse insurance platform development that help investors to get claims easily.  

Let’s discuss the concept of metaverse insurance. 

Insurance In The Metaverse

When we define metaverse insurance, we must always remember that it is the same as regular insurance in the real world. It can be explained as keeping your data safe from errors in the virtual ecosystem. The general ways for any data loss or a breach in the metaverse are hacking, ransomware attacks, and privacy breaches. 

Other than that, it depends on how much time we are present in the metaverse. Users with primary metaverse identities are more prone to identity loss or hacking. So every user must use the metaverse insurance per their personal and business requirements. Metaverse insurance is the most beneficial protection source for any metaverse risks. Policy covers may vary according to the insurance needs, but all policies cover third-party liabilities and first-party security losses. 

Many insurers are entering the digital world, so the time will come when metaverse insurance will hugely impact the virtual industry. The metaverse needs to be more flexible and collaborate with the best industry giants (government, banks, large entities) to attract more insurers to enter the virtual space. 

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Types Of Metaverse Insurance Policies

Smart Contract Policy Cover

This policy cover is required at the time of software hacking. The address can be hacked, and funds can be transferred to the digital wallet of the hacker. As funds transfer is an irreversible process, this policy compensates the users. 

Crypto Wallet Cover

Crypto wallet insurance protects funds if any crypto wallet gets hacked, in any case. Crypto wallet service can be hardware or software, and insurance is provided for both wallet types. 

Collateral Insurance

Collateral is a case when someone needs funds and repays it later. For the funds, the person has to provide a property in exchange for a loan fund. The lender can claim collateral protection if, in any case, the collateral gets stolen. 

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Metaverse Insurance Categories To Reside in Virtual World

Personal Information

Every individual in the Metaverse exists as data, creating a huge opportunity for data theft. Metaverse residents must use insurance products that resemble current cybersecurity policies to safeguard their data. The type of data that the insurance is safeguarding will make a difference. Virtual regulations will probably need to safeguard a digital person's core data and the data surrounding them. 

Digital Resources

Residents of the metaverse will possess personal, commercial, and business property. The risk associated with having property in the real world is the same as that of virtual property. Loss is a possibility on both ends of the computer.

In 2022, virtual real estate sales will reach over $1.9 billion, predicts MetaMetriks, a provider of metaverse land analytics. The digital assets that individuals are already buying and selling in the digital realm are not included in these monies. Despite not being analog, these assets nonetheless have value and require comprehensive insurance coverage. 

Physical Or Mental Injury

Although the potential damage to an avatar is not fully understood, there is a chance that it could have some sort of "data injury." Avatar creators who spend more time and money protecting their virtual health will need access to virtual health insurance.

In addition, it may be necessary to adjust conventional health insurance policies to provide coverage for the physical and psychological harm brought on by the prolonged use of stationary chairs and virtual reality computers and components.

Risk Control 

The insurance business will profit from creating strategies to assist virtual residents in preventing danger in the first place. The risks associated with operating in the Metaverse are mostly unknown or unforeseen. Insurance companies create coverage encouraging residents of the Metaverse to reduce risks rather than providing recompense for loss.

The experts at Suffescom leverage the power of metaverse to make all insurance processes seamless. We help you launch your own metaverse insurance decentralized platforms that provide military-grade security measures. 
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Impacts Of Metaverse Insurance on Insurers

Businesses have started utilizing the metaverse in various ways. Every business will eventually play a part in the metaverse, just as every business had to build a mobile website when mobile devices took over as the primary means of communication. We'll have to wait and watch how insurers use Metaverse or how it affects them.

Metaverse Knowledge

To raise public knowledge of insurance, insurers can use the metaverse. Due to the widespread availability of smartphones that can display augmented reality simulations, insurance companies can easily profit from these gadgets. Through AR and VR technology, they may raise awareness of the value of purchasing insurance in a fun and engaging way.

Utilizing AR and VR Insurance 

By collecting images of the damage and creating 3D models, surveyors and loss assessors can use augmented reality to identify the damaged region of various things and provide 360° assessments. Technical experts can comprehend the damage's extent with AR and VR technologies by superimposing object photos that show the thing's condition before and after the accident. They can assess the dimensions of damaged parts and determine the necessary repair expenses by using the information gathered and processed.

Ensuring the Metaverse

On the one hand, insurers would use the metaverse to interact with clients and enhance the claims process; on the other hand, they would ensure the metaverse. Users of the metaverse will be shielded from any potential flaws that can harm their assets within the metaverse. 

Users receive a special token or Non-Fungible Tokens (NFT), powered by smart contracts, as proof of their purchase with each purchase of various units of virtual currencies, tokens, and digital assets used for transactions within the metaverse. Smart contracts are exposed to a wide range of unforeseen frauds and hacks. These smart contracts may be covered within policies by insurance firms.

Data privacy

Data privacy Concerns with the metaverse may be a continuation of the privacy problems currently present in digital connectivity. The privacy laws already in place may be sufficient to regulate them. However, because the metaverse aims to provide an immersive experience, the data gathered for it may be more intrusive than now sourced. 

Real-time tracking of biometric information via VR/AR devices and sensors, such as facial expressions, eye movements, vocal inflections, respiration rate, and body temperature, could be abused to take advantage of the user or for financial benefit. Given the sensitivity of the data, privacy laws must be appropriately revised to account for the new data transmitted.

Data localization

Several nations are passing data localization laws that limit the data's ability to leave the country from where it originated. It must be made clear how this restriction will be applied in the metaverse, a world without boundaries that is only a digital one.

Intellectual property

Clarification is needed regarding protecting intellectual property when some anonymous users combine to create something new, given that the metaverse permits avatars to work together. The majority of the creations in the metaverse will be software-based, making them what might be called "abstract concepts." It is necessary to review the difficulties with the current procedures for patenting abstract ideas. 

It's possible that businesses building up their metaverse sites will seek to protect their real-world patents there. In these circumstances, the issue would be whether their current patents would be extended to the metaverse or if a new file was necessary. Will the current patent be excused during the prior art search if a new filing is required?

Assault and Harassment

Specifying the legal action to be taken when one avatar harasses or assaults another avatar in the metaverse is necessary. Even though haptic vests and gloves allow users to experience the sensations, an assault in the metaverse is impossible to prove because there is no physical damage left behind. Existing legal definitions of sexual harassment do not call for physical contact to qualify as such. Nevertheless, it must be made clear whether harassing a virtual avatar might be considered criminal behavior on the part of the actual user.

Virtual Assets Control

The definition of "ownership" in the virtual world must be considered because virtual assets like cryptocurrencies, non-fungible tokens (NFTs), and virtual real estate power the metaverse's economy. While some nations treat them as digital assets, others view them as commodities, securities, art, or property.
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Metaverse Impacts On Insurance Companies

Each user's avatar represents them in a virtual world, allowing them to interact with others in the metaverse. Insurance firms can interact with consumers' avatars using their own avatars and offer experiences free from the limitations of the actual world (for example, simulated experiences such as fire, natural disasters, or hospitalization). 

A "new economic sphere" is a thriving virtual economy where blockchain-based transactions involving digital assets like cryptocurrencies and non-fungible tokens (NFTs) happen more frequently and in higher volumes than ever before, eventually growing to a size comparable to financial transactions in the real world.

A new set of consumer needs will arise due to the metaverse's widespread use and the associated rise in social and commercial activities carried out through avatars, necessitating a shift in how insurance companies approach their clientele. The metaverse will accelerate the digitization of administrative processes, and asset management in the form of NFTs and cryptoassets may become more widespread.

Last but not least, 

The metaverse concepts could take years to transform the world. While looking for the future of the metaverse world, we must look for emerging virtual visions. First, the metaverse changes the living style of many users by creating some standards for seamless collaboration. Second, it allows avatars to travel to different places without changing devices.  

Insurance firms need to work with huge data analysis using Artificial Intelligence to find any issues in the metaverse and create policy covers accordingly. Suffescom Solutions Inc. provides infinite solutions for metaverse technology. We provide end-to-end services that have a significant impact on the insurance field. 

Connect with our experts to create your Decentralized Metaverse Insurance Platform. Hurry Up!

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