Risky Games: Assessing Insurance Coverage for Online Gaming

Over the past twenty years, online gaming has evolved from a form of home-based entertainment for computer nerds into a booming mass industry. 

As often happens with new technologies, some of them emerge with a heavy burden of potential societal problems. For online gaming, a major one is the so-called videogame addiction, defined as the excessive use of the Internet to play games. Players who become addicted begin prioritizing gaming over other interests and activities, which may lead to significant impairment in personal, family, social, educational, occupational, and other areas of their lives.

Moreover, videogame addiction is shaping up as a serious public health issue. Many studies have shown that it leads to brain changes that are similar to those occurring for other types of addiction, such as substance addiction and gambling. There is also an association between videogame addiction and depression. It’s for this reason that the World Health Organization has classified videogaming addiction as a disorder. (For more on videogame addiction, see here and here.) 

Worse, videogaming is becoming increasingly popular among children and adolescents, who, due to their psychological and social immaturity, are especially vulnerable to the often predatory practices (including “hooks”) employed by the game developers and distributors.  

All that means that the vast and growing gaming sector presents new risks to society that require adequate response in the form of insurance products. This includes coverage for game developers, esports professionals, and gamers themselves, all requiring customized coverage, given the unique risks faced by each group. Of special concern is the potential negative effect of videogaming on mental health, especially among children and adolescents. Another area requiring increased attention is cybersecurity, with data breaches being a constant threat calling for robust cyber liability coverage.

A challenge the insurance industry is facing is to develop a level of expertise to be able to identify, understand, and address the liability complexities of the gaming world to allow for the underwriting and pricing of these risks. The gaming industry is rapidly evolving, with new technologies, “hooks”, business models, and innovative products emerging every single day, forcing insurers to adapt “on the run.”

Topping all these challenges, the legal landscape surrounding esports and online gaming remains uncertain with many grey areas in place. Insurers therefore need to navigate these uncertainties, too, when designing coverage.

Aon, the Sponsor of this Challenge, is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Aon’s 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance. 

By posting this Challenge, Aon wants to generate a comprehensive snapshot of the status of the gaming industry, insurance products used to mitigate its risks, and the shortcomings of the existing coverage. Looking into the future, we also want to understand how the industry is evolving and what can be expected by the year 2030. How should the insurance industry evolve to adjust to this changing landscape? What kind of insurance products need to be developed to adequately address the need of the gaming industry six years from now?  

We’re asking for a comprehensive review of the gaming industry and its insurance coverage, today and in the year 2030. Every successful submission to this Challenge will include four parts:

Part 1. The status of the gaming industry today 

• What is the global market cap for gaming? How fast is it growing? What are the world leaders of the market by size?
• How many individual users are estimated to play regularly? How fast is this number growing? What are the countries with the largest number of users? What is the breakdown of the demographics of individual gamers by age, gender, education, income, etc.?
• How much time does an average gamer spend playing? Are there any estimates, however approximate, of the number of players with videogame addiction? Is there any data helping assign videogame addiction to gamers’ demographics? 
• What is the estimated number of professional players participating in esports competitions? What are the largest and most prestigious online gaming competitions? What is the size of the awards the winners earn? How many viewers do these competitions attract?

Part 2. The existing insurance coverage of the gaming industry

• What are the major insurance risks experienced by the various groups involved in gaming: game development companies, esports actors (competition participants and organizers), and the gamers themselves?
• What are the typical insurance products on the market for each category listed above? What is the current insurance capacity for each category?
• What are the potential shortcomings for each of the existing products? How can these shortcomings be fixed?
• Is the risk of mental health problems due to videogame addiction covered by any existing products? Are there any existing products targeting vulnerable demographics, primarily children and adolescents?
• Is the cybersecurity risk protected by existing cyber products or are new specialized products required to address the risks presented by cybersecurity breaches? 

Part 3. The projected status of the gaming industry in the year 2030

• What is the size of the global gaming market expected in 2030? Will the market retain its current growth rates? What country(s) is expected to have the largest number of individual gamers? 
• Can we expect the appearance of new forms of online games by 2030, for example, involving elements of virtual and mixed reality? How much can this change affect the economics of the gaming industry?
• Will the amount of time an average player spends playing change by 2030? Will the demographics of individual gamers (by age, gender, education, income, etc.) change by 2030?
• How will esports evolve by 2030? Can we expect more competitions, with more professional players participating, and larger awards offered? Will the media coverage of esports competitions become mainstream? Can this potentially result in the appearance of new liability risks?

Part 4. Based on the information presented in Parts 1-3, describe What will the insurance market for the gaming industry look like in 2030 

• Will the current insurance products remain relevant in 2030? What may become obsolete and why?
• What specific trends in the gaming industry will require the development of novel insurance products?
• More specifically, will the inclusion of elements of virtual and mixed reality into gaming require new forms of coverage? Why or why not?
• Will the growing threat of mental disorders caused by videogame addiction require the development of special products?
• Will the growing threat of cybersecurity breaches (and the growing sophistication of the hackers) require the development of special products? 
• What actions should the insurance industry take today to prepare itself for the challenges of 2030?

Every successful submission to this Challenge will be formatted as a 25-30-page report with a one-page Executive Summary. We expect these reports to be heavily data-driven, with the numbers and statements supported by examples, showcases, illustrations, etc. — all properly referenced. 

After the Challenge submission deadline, Aon will complete the review process and make a decision with regards to the winning solution(s) according to the schedule outlined in the Challenge Timeline.

Submissions will be judged based on their completeness and the strength of the supporting information. Submissions that provide full coverage of all four Parts of the Challenge will be given special attention. However, submissions that provide exceptional input to only two or three Parts will be considered for a runner-up award.

We envision that up to four (4) awards will be given to the proposals that best meet the Challenge Requirements. The following amounts will be awarded to each winner:

• 1st Prize: $8,000
• Three (3) Runners-Up: $4,000 each

We encourage the Challenge participants to use LLM algorithms for data collection and its preliminary analysis. However, we expect the participants to make sure that everything proposed by an LLM algorithm is properly vetted, verified, is placed in proper context by the participant. Submissions produced solely by generative AI will be discarded.