IMA Financial Group leaps into the digital landscape

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The metaverse may seem like a futuristic world in a galaxy far, far away. But IMA Financial Group has landed there and set up shop. They officially dove in two years ago, when they established IMA Web3Labs, the first Metaverse Insurance Research & Development Facility. Web3Labs sets new industry expectations for exploring, testing and bringing to market risk and insurance strategies specific to the metaverse. It is located in Decentraland, a virtual world based on blockchain technology.  

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“We want to be on the scene during what we consider to be the third generation of the internet,” says Paul Washington, Executive Vice President of IMA Financial Group and head of IMA Investments. “We want to absorb and observe real time what’s happening in this new paradigm of the internet, so we can help our customers navigate through it. It's about understanding and adapting to the digital landscapes of tomorrow.” 

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Among his many roles at IMA, Washington manages investments in insurtech companies. Here, he answers our questions about Web3Labs and their journey into the digital frontier.

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What is the metaverse?

“In the same way that the internet is hard to describe, the metaverse is hard to describe. To put it simply, we think the metaverse is the internet of the future. I think of the metaverse like a .com in the early ‘90s. In the metaverse, we'll all have virtual lives, similar to how we all now have social media accounts. Just like your physical self, your virtual self will require resources to thrive; thereby creating value of these resources that will ultimately need protection. Really, we are already living in the metaverse. The tools are simply getting better to bring it all together.”

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Why did you purchase space in the metaverse?

“When I was pitched this opportunity, I struggled conceptually with making an investment in something that’s not tangible. As I researched and explored the opportunity, I began to question the notion of tangibility. There are a lot of things you can purchase that aren’t tangible but have value. But the investment isn’t about a physical asset. Our intent is not to sell our plot in the metaverse. Our intent is to buy the opportunity to observe the metaverse as a vested owner. The investment was modest and it allows us to have some credibility as we navigate the space. It’s not materially different than investing in a website, which most people wouldn’t think twice about doing today.”

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What is Web3Labs?

“Web3Labs is our way of bringing web3 technology into the insurance ecosystem. It’s a sandbox, rather than a defined business unit. It’s a cross-functional platform designed to test, incubate and deploy leading-edge technologies in partnership with our business. This includes using blockchain technology and digital assets to issue insurance policies.”

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Why was the metaverse an important investment for IMA?

“The metaverse represents the future of the internet. Internet 2.0 came with social media and the convergence of online communities and digital identities. Web3 or Internet 3.0 simply expands upon that and brings greater stability, scale, and security. By building an R&D facility in the metaverse, IMA gains early-adopter advantage in understanding the new paradigm of the internet. Understanding how to navigate and do business in Web3 helps IMA better understand risk, consult with our clients and eventually explain to the insurance marketplace how to price said risk. Additionally, IMA has a large client base in web3. By participating in this emerging technology platform, IMA is better suited to serve clients that seek to build business models inside of it.”

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What is IMA hoping to accomplish within the metaverse?

“It’s really quite simple. We want to accelerate our learning and plant a flag, so to speak. We want to explore the metaverse now so these concepts aren’t foreign to us in the future. With this purchase, which was extraordinarily complex, we are now able to understand what it’s like to participate in this new internet. We are also reinforcing our brand as an innovative, progressive company that has an insatiable appetite for innovation. Overall, we want to better understand how to help build products and services for companies looking to build a metaverse strategy within their businesses.”

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What challenges have you experienced thus far?

“As with many emerging technologies, there have been stops and starts along the way. There is a new language that needs to be understood. We had a lot of challenges to overcome. For example, how do you set up digital asset wallets and transact virtual currency in this new economy? How do you hire developers that speak Solidity or other modern programming languages for web3? How do you message to associates the ‘why’ of this business imperative? The intersection of AI and blockchain will be significant. We believe it will only increase the opportunity for the industry in the metaverse.”

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What does this mean for the insurance industry?

“Virtual lives have real risks. In the metaverse, our virtual selves engage in activities, transactions, and interactions that mirror the physical world. From virtual assets to digital liabilities, there's a growing need for insurance coverage tailored to this realm. Traditional insurance models may not suffice in a world where virtual experiences hold tangible value. It really is an exciting new frontier.

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Additionally, the metaverse brings new risks to a company’s risk profile. There is great demand for new insurance products that address these risks and allow for innovation under the protection of risk transfer.”

The metaverse means new opportunities

“The metaverse is simply a continuation of consumer engagement,” adds Washington. “The metaverse is not a thing, it is a point in time where the value we place on digital interactions intersects with the value we place on physical interactions. Instagram is an incredible example of how we believe the metaverse will evolve, from a haphazard library of random photos to a meticulously curated platform where 'likes’ can translate into hard currency.”

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By proactively engaging with this emerging digital landscape, companies like IMA are not only future-proofing their businesses, but also shaping the way we perceive and mitigate risks in a rapidly changing world. 

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