Metaverse and insurance
Written By
Partner
Spain
I am partner and Head in Bird & Bird's Insurance and Reinsurance department in the Madrid office, Co-Head of the International Insurance Group and Co-Head of the firm´s LatAm Group.
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In Ready Player One (a novel published by Ernest Cline in the now distant 2011) a large part of the population lives in a parallel reality, Oasis, for many more tangible and important than the real world and where most of their lives take place. If today our brains can already be transferred by VR devices to this virtual reality, which will imitate the real world to a large extent, we will encounter new insurable risks and others that, although with nuances, may be very similar to those we already know.
A world of services will be created in this virtual universe, including financial services, although it is still in the early stages of its development (for example, current technology does not allow immersion in the Metaverse via mobile phones).
Are the risks in the Metaverse insurable? I think there is no doubt about it. In fact, it has even been said that the Metaverse is the new frontier of the insurance industry and we already have tangible examples of digital assets that can achieve high value and could be traded in the Metaverse, such as NFTs (Non-Fungible Tokens). The insurance of these assets meets the fundamental elements of any insurance: the existence of an insurable interest, the risk and the eventuality of damage occurring as a result of a loss.
The possibility of insuring risks in the Metaverse is indisputable. In the Metaverse it will be possible to insure, for example, damage to virtual real estate, theft of digital assets, cancellation of events such as virtual concerts, theft of cryptocurrencies, and even the very common household accidents caused by overly immersive experiences with virtual reality equipment.
With these insurances, personal data or digital assets can be protected, insurers will be able to offer their insurance coverage in this virtual world, directly or through intermediaries, and premiums can be paid with official currency or with cryptocurrencies (it seems hard to imagine that insurers operating in the Metaverse will not…
