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> valuable data to insurance companies Great idea! But on the other hand I'm sorry to inform you that your insurance has gone up, because we found that driver

> valuable data to insurance companies Great idea! But on the other hand I'm sorry to inform you that your insurance has gone up, because we found that drivers in your neighbourhood are in general 2498% more likely to have accidents. Maybe you're next. We'll just make sure that rates have already been adjusted to account for that. Also we saw that you were driving (very smoothly, congrats on that!) around some rather shady parts of town. This will lead to another rise in your fees, we just want to make sure that we got you covered in case your car gets stolen...

ndsipa_pomu 3y ago
I believe insurance companies already look at your location when deciding premiums, so this would just give them greater granularity on your actual driving habits.
- isoprophlex 3y ago
  In the limit of perfect knowledge being transferred to your insurer, will an insurance stop being one, instead turning into an obligation to pay a middleman for all your claims?
  - ndsipa_pomu 3y ago
    Only if that perfect knowledge includes knowledge of future events such as a tree falling on your car or it being struck by lightning etc.
jeroenhd 3y ago
> But on the other hand I'm sorry to inform you that your insurance has gone up, because we found that drivers in your neighbourhood are in general 2498% more likely to have accidents. These types of statistical analyses are exactly why insurance is as cheap as it is. I'm no fan of all the discounts insurance companies hand out for handing over private data like driving behaviour or healthcare stuff, but insurance companies with no risk management can't compete in any kind of open market. I would argue that in terms of broader accessibility of insurance, these microtargeting approaches may actually be an improvement for many. If you live in a troublesome neighbourhood you may be paying through the nose for getting categorised as "one of the bad ones", but these individual data points can help prove you're a responsible driver and escape some of the cost of having a shitty start in life. I'm still against these data collection practises ("you want privacy? Live in a rich neighbourhood and get a college degree!", plus a lack of any kind of law preventing these companies from sharing or selling that data) but there are solid arguments in favour of feeding insurance companies more data.
- gruppe_sechs 3y ago
  As the modelling gets better, are we ultimately heading for a future where the only people who are able to get insurance are people who don't need it, because they aren't going to make a claim? If insurers get too good at predicting the future then it breaks their entire business model.
  - ndsipa_pomu 3y ago
    Insurance is for unpredictable outcomes such as a lightning strike hitting your car or even just another driver having an undiagnosed medical event that causes them to crash into your car. Why would you want insurance for predictable events when you can just put the money to one side yourself and not feed the insurance companies' profits?
    - abduhl 3y ago
      Insurance is for hedging against a risk. It has nothing to do with predictability. In fact, the bedrock of insurance is predictability. You have a 1% chance of sustaining $1MM in damage. Do you carry around a million dollars or do you get insurance? What about a billion? What about a thousand? Congratulations, you now know what you’re willing to pay for a deductible and what you’re going to look for in an insurance policy max.
      - ndsipa_pomu 3y ago
        I'm not understanding your point. The 1% chance means that you are uncertain whether or not you are going to be in that 1%. Otherwise, some people would have 100% chance of sustaining $1MM in damages and others would have zero% - that's predictability. Similarly, insurance companies frown on people getting insurance when the person knows that they have a claim to make - when there is certainty, then insurance is the wrong product and may be considered insurance fraud. I think you're mixing up predictable events with probabilistic events. Just because you know the average likelihood of an event occurring does not mean that it is predictable. (e.g. the chance of getting red or black on a roulette table has known odds, but you're only going to be able to win if you can predict the outcome)
maksimur 3y ago
I don't know what it's like in USA, but where I'm from insurance premiums change a lot from location to location, so much that some people change their residence to a cheaper city.
- jwestbury 3y ago
  They change a lot in the US, too, and different companies have different methods of spreading risk across geographical areas, which can lead to shockingly different prices from different insurers depending on your location.
rjmunro 3y ago
> ... your insurance has gone up, because we found that drivers in your neighbourhood ... That's what happens now. This would be "your insurance has gone up because you are more likely to have an accident. If you drive more carefully you can get a discount." It's actually a thing already here in the UK. Many insurers let you get a black box and if it shows that you drive carefully you get a discount on your premium.

ndsipa_pomu 3y ago

I believe insurance companies already look at your location when deciding premiums, so this would just give them greater granularity on your actual driving habits.

isoprophlex 3y ago
In the limit of perfect knowledge being transferred to your insurer, will an insurance stop being one, instead turning into an obligation to pay a middleman for all your claims?
- ndsipa_pomu 3y ago
  Only if that perfect knowledge includes knowledge of future events such as a tree falling on your car or it being struck by lightning etc.

jeroenhd 3y ago

> But on the other hand I'm sorry to inform you that your insurance has gone up, because we found that drivers in your neighbourhood are in general 2498% more likely to have accidents. These types of statistical analyses are exactly why insurance is as cheap as it is. I'm no fan of all the discounts insurance companies hand out for handing over private data like driving behaviour or healthcare stuff, but insurance companies with no risk management can't compete in any kind of open market. I would argue that in terms of broader accessibility of insurance, these microtargeting approaches may actually be an improvement for many. If you live in a troublesome neighbourhood you may be paying through the nose for getting categorised as "one of the bad ones", but these individual data points can help prove you're a responsible driver and escape some of the cost of having a shitty start in life. I'm still against these data collection practises ("you want privacy? Live in a rich neighbourhood and get a college degree!", plus a lack of any kind of law preventing these companies from sharing or selling that data) but there are solid arguments in favour of feeding insurance companies more data.

gruppe_sechs 3y ago
As the modelling gets better, are we ultimately heading for a future where the only people who are able to get insurance are people who don't need it, because they aren't going to make a claim? If insurers get too good at predicting the future then it breaks their entire business model.
- ndsipa_pomu 3y ago
  Insurance is for unpredictable outcomes such as a lightning strike hitting your car or even just another driver having an undiagnosed medical event that causes them to crash into your car. Why would you want insurance for predictable events when you can just put the money to one side yourself and not feed the insurance companies' profits?
  - abduhl 3y ago
    Insurance is for hedging against a risk. It has nothing to do with predictability. In fact, the bedrock of insurance is predictability. You have a 1% chance of sustaining $1MM in damage. Do you carry around a million dollars or do you get insurance? What about a billion? What about a thousand? Congratulations, you now know what you’re willing to pay for a deductible and what you’re going to look for in an insurance policy max.
    - ndsipa_pomu 3y ago
      I'm not understanding your point. The 1% chance means that you are uncertain whether or not you are going to be in that 1%. Otherwise, some people would have 100% chance of sustaining $1MM in damages and others would have zero% - that's predictability. Similarly, insurance companies frown on people getting insurance when the person knows that they have a claim to make - when there is certainty, then insurance is the wrong product and may be considered insurance fraud. I think you're mixing up predictable events with probabilistic events. Just because you know the average likelihood of an event occurring does not mean that it is predictable. (e.g. the chance of getting red or black on a roulette table has known odds, but you're only going to be able to win if you can predict the outcome)

maksimur 3y ago

I don't know what it's like in USA, but where I'm from insurance premiums change a lot from location to location, so much that some people change their residence to a cheaper city.

jwestbury 3y ago
They change a lot in the US, too, and different companies have different methods of spreading risk across geographical areas, which can lead to shockingly different prices from different insurers depending on your location.

rjmunro 3y ago

> ... your insurance has gone up, because we found that drivers in your neighbourhood ... That's what happens now. This would be "your insurance has gone up because you are more likely to have an accident. If you drive more carefully you can get a discount." It's actually a thing already here in the UK. Many insurers let you get a black box and if it shows that you drive carefully you get a discount on your premium.