Article December 14, 2022

Understanding and insuring risks in the metaverse

New risks are emerging as the metaverse network is growing. So, how do we plan for future whilst keeping focused on today?

Metaverse projects are attracting huge investments from big tech and business organisations, fuelling the hype around this new virtual world. But how well do we understand the evolving risks associated with the metaverse and how well are insurance products catering for them in the here and now?


Too focused on tomorrow?

When it comes to technology, the natural tendency is to get excited about future possibilities and to overlook what’s happening now. The metaverse is a classic example – despite all the talk of experiential lifestyle platforms, new gaming experiences and transformative working solutions, most of these ideas are still in their early development stages.

There are only a handful of technology companies providing immersive worlds for users to engage with others. And when you boil that down, it’s really just the internet entering a new phase in 3D.

So, rather than getting caught up in the hype, the insurance industry needs to keep its sights trained on the short-term risk landscape.

The opportunity for insurers lies in understanding how existing risks are evolving and pinpointing where new ones are emerging. Addressing these issues will offer immediate value to customers and emphasise the industry’s relevance.

Today’s emerging risks

As technologies evolve, we need to question if existing policies address the increasingly complex exposures created by the more integrated nature of our digital and physical worlds.

For example, what new risks come with e-sports that may not exist with traditional sports? Are existing covers fit for purpose? If not, what do we need to change?

Similarly, can today’s property products provide cover for virtual assets? If not, how should they be adapted?

And what about liability exposures relating to stalking, bullying, discrimination and harassment? These aren’t new issues, but in the metaverse they’ve found a new stage for their unwanted presence. Do today’s policies provide the protection needed when they occur in this environment?

Sitting behind all these advances in technology is the intellectual property that powers them. As organisations digitise existing operations and/or develop new products and services, protecting their IP against infringement is increasingly important.

They’ll also have to guard against others accusing them of IP infringement – either way, pursuing or defending a lawsuit can be costly. But organisations can’t afford not to if they want to protect their value, their brand and their reputation.

New industries

The digital age has also spawned many new sectors – the influencer marketing industry is expected to grow to $16.4bn this year.

Many of these young businesses have overlooked the risks that come with operating online. Some have had their accounts hacked and been held to ransom; others have faced costly and protracted IP infringement litigation.

Creating policies that cater for these industries, as well as finding ways to communicate to these new audiences, should be a priority for insurers.

Focus on facts

Right now, the biggest challenge for underwriters is separating fact from fiction and not spending too much time on developing products for technologies that never materialise or take significantly longer to evolve than anticipated.

Rather, we need to keep a weather eye on the future, but prioritise the value we can provide today. If we focus too much on building metaverse specific products for the medium term, we’re not going to be able to support our clients with the challenges they face today. And that would do both them and us a disservice.

If you have any questions, feel free to reach out to our team at