This article was first published by Marsh here.
Today’s connected world has opened new opportunities for businesses and individuals. The emergence of immersive experiences, such as the metaverse, are taking connectivity to a new level. As technologies — including advances in connectivity speeds, 3D reconstruction, artificial intelligence, and augmented or virtual reality — advance, the metaverse is providing new ways to engage users, explore new places, and conduct business.
While more than half of our survey respondents said operations in the metaverse are not currently on their agenda, the global metaverse is growing steadily, with revenue projected to approach $800 billion by 2024.
The opportunities in the metaverse are enormous, from allowing customers to virtually try on clothes to use in human or avatar form, to providing more immersive customer service experiences, to improving the reach and delivery of education, to leveraging AR technology to increase access to healthcare. And as AR/VR headsets and haptic wearables become more technology developed and more affordable, adoption of the metaverse is likely to become more widespread.
But organizations that have already established or are considering establishing a presence in the metaverse — as are more than a third of our survey respondents — need to think beyond the opportunities and consider the fast-evolving set of risks.
While some risks are familiar, such as those related to e-commerce and the potential of a cyber event, others are less straightforward. For example, while only one-fifth of our survey respondents listed bodily injury as a risk of high concern, today there is limited data showing the potential longer term health implications arising from prolonged use of VR headsets. There may also be physical injury risks if haptic wearables malfunction.
Additionally, the current lack of regulatory clarity leads to significant questions about liabilities. For example, how is property defined in a virtual environment? And with many transactions taking place using cryptocurrencies, insurance coverage for potential losses is still being put to the test.
Further, there are questions about the regulatory oversight of assets in immersive environments. For example, who is responsible and under which jurisdiction if a client’s avatar is assaulted by a malicious third-party actor inside a company’s virtual store that operates on a decentralized metaverse platform? Organizations need to stay on top of the latest regulations and be aware of the potential reputational and legal repercussions of operating in the metaverse.