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New Realities Risks in the Virtual World 2 Emerging Risk Report 2018 Technology New realities Risks in the virtual world 2 Lloyd’s disclaimer About the author This report has been co-produced by Lloyd's and Amelia Kallman is a leading London futurist, speaker, Amelia Kallman for general information purposes only. and author. As an innovation and technology While care has been taken in gathering the data and communicator, Amelia regularly writes, consults, and preparing the report Lloyd's does not make any speaks on the impact of new technologies on the future representations or warranties as to its accuracy or of business and our lives. She is an expert on the completeness and expressly excludes to the maximum emerging risks of The New Realities (VR-AR-MR), and extent permitted by law all those that might otherwise also specialises in the future of retail. be implied. Coming from a theatrical background, Amelia started Lloyd's accepts no responsibility or liability for any loss her tech career by chance in 2013 at a creative or damage of any nature occasioned to any person as a technology agency where she worked her way up to result of acting or refraining from acting as a result of, or become their Global Head of Innovation. She opened, in reliance on, any statement, fact, figure or expression operated and curated innovation lounges in both of opinion or belief contained in this report. This report London and Dubai, working with start-ups and corporate does not constitute advice of any kind. clients to develop connections and future-proof strategies. Today she continues to discover and bring © Lloyd’s 2018 attention to cutting-edge start-ups, regularly curating All rights reserved events for WIRED UK. About Lloyd’s Coming from a non-traditional technology background she has a unique talent for making the complex Lloyd's is the world's specialist insurance and accessible. Since going freelance in 2017 she has reinsurance market. Under our globally trusted name, become an in-demand international speaker. As an we act as the market's custodian. Backed by diverse independent futurist, clients often find her frank, global capital and excellent financial ratings, Lloyd's unbiased, and ethical assessments a refreshing works with a global network to grow the insured world – contrast to speakers who endorse, sell and market. building resilience of local communities and strengthening global economic growth. She's lectured at Cambridge University, written an award-winning book, and directed the first burlesque With expertise earned over centuries, Lloyd's is the show in 360° video. In 2016 she led an experiment that foundation of the insurance industry and the future of it. measured the emotional data of people ages 3-80 as Led by expert underwriters and brokers who cover more they experienced virtual reality for the first time. Her than 200 territories, the Lloyd’s market develops the writing is often featured in WIRED UK, IBC365, and The essential, complex and critical insurance needed to Big Reveal, her popular monthly innovation newsletter. underwrite human progress. She is currently working on her next book. Key contacts ameliakallman.com Trevor Maynard Lucy Stanbrough MSc, BSc, is an Associate in the Head of Innovation Innovation team at Lloyd’s. Subjects covered in recent [email protected] years include: cyber scenarios; future city resilience; and disaster risk finance. Prior to joining Lloyd’s, she For general enquiries about this report and Lloyd’s worked for over 10 years as a natural hazards and GIS work on innovation, please contact consultant, alongside working at the UCL Hazard [email protected] Centre. Lucy has contributed to a number of books on the use of technology and online systems pre, during, and post-disaster. She maintains an interest in the integration of scientific knowledge to business applications, and connecting knowledge to people, and people to knowledge. New realities: risks in the virtual world 3 Acknowledgements The following people were consulted or commented on earlier drafts of the report; we would like to thank them all for their contributions: Lloyd’s project team − Dr Trevor Maynard, Head of Innovation − Dr Keith Smith, Research and Development Manager, Innovation team − Lucy Stanbrough, Associate, Innovation team − Phil Godwin, Head of Claims, Policyholder & Third Party Oversight − Flemmich Webb, Senior Manager, Strategic Communications − Elliot Maule, Senior Programme & Marketing Manager, Global Development Centre − Linda Miller, Marketing Manager, Marketing & Communications − Beth Jump, Marketing Graduate, Marketing & Communications Lloyd’s Market − Rooney Gleason, President, US Grocery & Retail, Argo Insurance − David Melvin, Head of Corporate Transformation Strategy, MS Amlin − John Munnings-Tomes, Chief Risk Engineer, Navigators Group New realities: risks in the virtual world Contents 4 Contents Executive summary ............................................................................................................................................................... 5 1. Introduction ....................................................................................................................................................................... 8 1.1 Common terminology .................................................................................................................................................. 8 1.2 The development timeline ......................................................................................................................................... 10 2. Current tech and future developments ........................................................................................................................... 15 2.1 Current innovations ................................................................................................................................................... 16 2.2 Developing innovations ............................................................................................................................................. 18 2.3 Innovations beyond the horizon ................................................................................................................................ 22 3. Uses and impacts ........................................................................................................................................................... 24 3.1 Sales and marketing .................................................................................................................................................. 24 3.2 Collaboration and communication ............................................................................................................................. 28 3.3 Training...................................................................................................................................................................... 32 4. Emerging risks and liabilities .......................................................................................................................................... 37 4.1 Human risks .............................................................................................................................................................. 37 4.1.1 Physical implications .............................................................................................................................................. 37 4.1.2 Mental implications ................................................................................................................................................. 39 4.1.3 Digital consent ........................................................................................................................................................ 41 4.2 Data risks................................................................................................................................................................... 42 4.2.1 Inaccuracy .............................................................................................................................................................. 42 4.2.2 Data and cyber security.......................................................................................................................................... 43 4.2.3 Identity .................................................................................................................................................................... 45 4.2.4 Intellectual property and value in a virtual world .................................................................................................... 46 5. Conclusion ...................................................................................................................................................................... 47 References .......................................................................................................................................................................... 49 New realities: risks in the virtual world Executive summary 5 Executive summary ‘The new realities’, a term coined by futurist and author of Currently, most new realities technology is being this report, Amelia Kallman, covers augmented reality developed for consumer markets – video games, for (AR), virtual reality (VR) and mixed reality (MR) example - but there are an increasing number of technologies. While gaming has been a focus of these applications aimed at the commercial sector. These
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