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Data Mining Exec Pays For Burgers In Cash To Avoid Insurance Company Snooping
- nivertech 14y agoI guess he 100% sure, that his insurance company do not data mine techdirt.com ;)
- planetguy 14y agoEhh, the miles which I get by using my credit card wind up being worth about 2%, so you'd have to convince me that each five-dollar burger raises my insurance premium by more than ten cents.
- excuse-me 14y agoI suspect that if you eat enough burgers that a 2% cash back is significant - it's not just your insurance company that should be worried!
- sliverstorm 14y ago2% on any one item is of course not all that significant, but like any other salami-slicing deal you have to make a habit of taking advantage of it wherever possible.
- ojbyrne 14y agoThat's not a completely correct analysis, as the insurance premiums are a recurring payment. So it would have to increase the present value of the stream of recurring payments by more than ten cents.
- spindritf 14y agoDiscounted to the present value.
- prodigal_erik 14y agoIf habitual eating is more predictive than occasional binging, the model won't be linear. There may even be some threshold that simply makes you uninsurable in the distant future. But this may turn out to be a bad example, if medicine continues finding that heart attack risk is mostly linked to cholesterol you produce yourself (this is apparently hereditary), and not much affected by cholesterol you eat.
- Jare 14y agoThe original article linked talks about some company buying an old lady's health insurance (they end up not buying because they datamine and find the lady is not unhealthy). That such a thing is possible blows my mind - a company placing an explicit bet on someone's death?
- yummyfajitas 14y agoThat such a thing is possible blows my mind - a company placing an explicit bet on someone's death? Um, life insurance is also a explicit bet on someone's death, right (a short bet, but a bet nevertheless). Also, a defined-benefit pension plan is a long bet on someone's death.
- tankbot 14y agoa company placing an explicit bet on someone's death? This is what the entire life insurance business model is base on. What's amazing is the level of information gathering possible now, not the fact that they're (still) doing it.
- chris_wot 14y agoYes, but interestingly they aren't very happy about Viatical Settlements, because it's a guaranteed loss for the neurone company. But totally legal.[1] 1. http://www.lisa.org/content/51/Life-Settlement-History.aspx http://www.lisa.org/content/51/Life-Settlement-History.aspx
- deleted 14y ago[deleted]
- jessriedel 14y agoLife insurance is a bet on someone's life, but it's one that the insurance companies pays out if you die. Annuities are a bet that pay out when if you don't die. How else would people hedge against this stuff?
- mikecane 14y agoBetting on Death http://www.washingtonpost.com/wp-dyn/content/article/2009/06/20/AR2009062000010.html http://www.washingtonpost.com/wp-dyn/content/article/2009/06...
- ck2 14y agoNot only to avoid data-snooping but a great way to stay on budget is to once a week buy a ~$1 item and get cash withdrawal at the register. Then use that cash for the week without going over because you cannot use your card again.
- jmount 14y agoJust a marketing stunt.
- brianmwaters 14y agoHonestly - the guy should apply his thoughtfulness and drive toward not eating so many hamburgers. There is a good reason why the insurance companies want to see that information. I'm more or less young and healthy, and I think that my purchasing history would probably reflect that. But if they dug deeper, or took a look at my social networking profiles, they'd find out that I'm a climber. There are even picture of me on Facebook climbing ice without a rope. I have heard that banks will be looking at our profiles in order to help determine our credit worthyness in the next few years; could medical insurers do the same?
- jackalope 14y agoI have a very healthy diet, but I buy all of my produce at markets that only accept cash. I wonder what conclusions an insurer would draw from my supermarket purchases (mostly meat & dairy)?
- kintamanimatt 14y agoThat you're a fattychunks and need to be charged a higher premium to compensate for your vegetable-free diet. /s Data mining is very hard to get right. Suppose I swipe my card at McDonalds every few days. That charge alone doesn't even mean I'm eating unhealthy food. I could be buying food for the homeless dude outside, or just buying bottle after bottle of Dasani for lulz. People do unusual and unpredictable things all the time.
- jrockway 14y agoRemember, this isn't a court where you get to argue your individual case. If data mining starts affecting insurance premiums, you probably aren't going to notice. The insurance company is not going to say "because of your daily McDonald's purchases...". They're just going to say, "effective 6/6/2020, your rate is $x". People that do "unusual and unpredictable things all the time" are so rare that they don't matter at the scale of data mining. Most people do usual and predicable things, and that assumption is probably worth money. However, a number of factors have to come together for this to work. First, the insurance companies need to correlate purchases and insurance claim rate. Then insurance companies need to secretly implement this plan. Then when you get the letter that says your premiums are being raised, they need you to not switch to a competitor that is undercutting their new rate. And finally, they'll have to avoid the rage of citizens and legislators. With their upcoming special status in 2014, it's unlikely that lawmakers are going to let insurance companies do whatever they want. So ultimately, being different isn't going to protect you from data mining, but I think the market will. Do you want to be the first company to announce they're spying on your purchases? Do you want to own the grocery chain that's known as the spying one? Probably not.
- SoftwareMaven 14y ago
- rhplus 14y agoI buy fruit and vegetables in bulk from a small local store and pick up beer and convenience food from nearby supermarket when I need it. It's crossed my mind more than once that the supermarket is the one that's most likely to sell my purchasing history, and within that data-set I'm a junk food addict. Which is why I sometimes throw some fruit into my basket, just to skew the data a little.
- excuse-me 14y agoThere was a US supermarket that threatened a customer who was suing them after he slipped in their store - they said they would present the history of his liquor purchases to suggest to the court he was alcoholic
- stfu 14y agoAny source for that? Sounds almost too good to be true.
- dredmorbius 14y agoIt's happened at least one. Von's, in southern California: http://www.bendover.com/askbenquestion.asp?faq=3&fldAuto=70&chapter_fldAuto=14 http://www.bendover.com/askbenquestion.asp?faq=3&fldAuto... http://www.seattleweekly.com/1998-09-23/news/when-cards-come-collecting/ http://www.seattleweekly.com/1998-09-23/news/when-cards-come... The loyalty cards can also backfire on supermarket chains. Safeway was sued for not notifying customers of product recalls even though it had the purchase data: http://www.progressivegrocer.com/top-stories/headlines/health-wellness/id32053/safeway-sued-for-failure-to-notify-consumers-of-recalled-food/ http://www.progressivegrocer.com/top-stories/headlines/healt...
- rprasad 14y agoVons threatened to introduce the issue at trial. They were not allowed to introduce the evidence at trial, and they did not. Ultimately, the shopper failed to prove his case. He claimed Vons was negligent for not cleaning up spilled yogurt, but during the trial somehow failed to prove (1) that there was some spilled substance which would have caused him to slip and (2) that his knee injury was caused by the slip and not by subsequent activities after he left the store.
- citricsquid 14y agoKey point: > he predicts He's avoiding it because he thinks it's the natural progression of the product these companies offer, not because they do, it might never happen.
- dredmorbius 14y agoHere's the bit about all of this data tracking that bothers me the most. The data is, in large part, a one-way street. The companies which are most aggressive in collecting information are also the most aggressive in not disclosing how they use, share, distribute, aggregate, correlate, etc., this information. Look at the NDAs and "no talk" policies of Google, Facebook, any of the credit bureaus, to say nothing of the vastly less visible enterprises which service the B2B markets of data mining and information. It's an area in which I had some experience and washed my hands in disgust years ago -- it's also an area in which I'd very much like to leverage open channels and tools to provide the public with the ability to fight back against the problem. I've had a very clear view for over a decade now that this will not end well. The truth is that the public has little understanding of what data are being used, how, or by whom. Much more pernicious is how data can be aggregated. Your insurance company gets information about your car and license. Your smog check station runs a standard battery of tests against your vehicle and reports this to the state in a large electronic record. Your state turns around and sells this database, at a very, very low charge, to companies providing services to the insurance industry, so that based on VIN and license information, a huge dump of data form your car's onboard data collection systems is now available to your insurer. They're mostly interested in total mileage, but as car data collection systems advance, there could be a great deal more information there -- accelleration/decelleration, speed, conceivably in the future, GPS waymarks. And you'd never know about it. The mileage stuff? That's for realz and has been for a decade or more. Edit: and just to put a face on this: http://www.iso.com/ http://www.iso.com/ The truth? That few even within the datamining field know what others within the field are doing with data (see above WRT one-way information), unless that information is being directly marketed/sold. Where derived products (e.g.: risk/profitability profiles based on models in which individual inputs are not disclosed) are sold, even uses which are directly sold may be using information in way undisclosed to the data suppliers / users, let alone the members of the public who are being profiled. What could possibly go wrong?
- cs702 14y agoI've been using cash for certain purchases for several years now, because consumer-protection laws, regulations, and policies are far, far, far behind the tectonic shifts that have already occurred in the world of data mining.
- jrockway 14y agoCare to elaborate?
- cs702 14y agoHere are some examples of things I prefer to buy with cash: purchases at airports (junk food, junk media, junk items); purchases while traveling by car (mostly junk food); purchases on riskier/dicier neighborhoods and areas; certain occasional purchases at the grocery store or pharmacy. Also, on occasion, I will refrain from buying or getting certain things if I can't buy or get them anonymously. Until the legal, regulatory, and cultural environment meaningfully change, my presumption is that every single non-anonymous purchase I make can and probably will be used against my economic interests, sooner or later.
- jrockway 14y agoWhat about the tinfoil for your hat?
- luser001 14y agoI still don't understand how your actions are influenced by developments in data mining. Am I missing something? It seems like you're just protecting yourself from your card information getting recorded and replayed (old hack in the book).
- ams6110 14y agoWhy is it not fair for an insurance company to charge you a higher premium if you are leading a lifestyle that statistically makes you more likely to have health problems?
- Mz 14y agoInsurance theoretically spreads risk and operates on laws of large numbers -- in other words, the company is betting that if 500,000 people buy this policy, statistically it will only pay out on a relatively small number of them, thus covering operating expenses and turning a profit. But, for health insurance,* it tends to not really work that way. You don't get 500,000 completely random people buying the policy. People are more likely to buy the policy if they have reason to believe they will need/profit from it. So insurance companies try to account for that reality. I think it is a fundamentally broken system. * Car insurance, which is basically required across the U.S., seems to work a little closer to the way it is "supposed to".
- olefoo 14y ago1. You are making the assumption that the insurance companies models of what is and is not a risky lifestyle are correct. 2. For the same reason that your employer is not entitled to put cameras in your bathroom to make sure you aren't doing anything that might impact your job performance.
- 3143 14y ago1. All other factors being equal, insurance companies with more accurate statistical models will do better. 2.. Because many employees would choose to not work for such an employer, and this negative impact would outweigh the potential benefit? I haven't seen anything to suggest that people would choose not to be insured by a company that profiles its clients in this way.
- Cadsby 14y agoI think on a principled level, many are becoming concerned about the ever increasing volume of data being collected on all of us. It isn't necessarily about any particular subset of data, or all the plausible abuses of it, it's just the idea that some would rather not have every move they make being recorded and logged into a system they have no information on or ability to influence. More specific to insurance companies, the potential/plausible abuses to increase profit don't take much effort to ferret out. And to make matters worse the data they use will invariable flag a lot of false positives that you'll have little to no way of fixing. For example, my girlfriend regularly picks me up a pack of cigarettes on her way home from work. She usually uses her credit card instead of cash. Ok, now she's flagged in the system as being a chronic smoker and her rates get jacked up to holy hell. Except, of course, she's not actually a smoker and I'd be super skeptical about her ability to reasonably explain this to some random customer service rep over the telephone. Data mining usage habits rarely result in lower prices for people making positive, less risky choices. Non-smokers will probably be giving a trivial token discount, but unlikely anything more.
- hexagonal 14y agoDouble blogspam: three-paragraph summary of a five-paragraph summary of a six-paragraph Economist article.
- kirian 14y agoThis is why I think something like Bitcoin is so vital. As physical cash is more and more being replaced by digital money the ability to have financial privacy is imperative. Think about all the data mining that would be possible if your every transaction ever was recorded in some database. The financial privacy possible with Bitcoin is one of its best qualities in my opinion.
- rogerbinns 14y agoWhat is the difference between a bitcoin transaction and a theft? If you have total financial privacy then the law can't help, and a heck of a lot of people are going to want police/law intervention when they get robbed or any other injustices.
- kirian 14y agoI don't really get what you are trying to say, why is a bitcoin transaction the same as a theft? A bitcoin transaction is the digital equivalent of a cash transaction, you can keep your financial privacy so that all your transactions are not stored in a database linked to your identity.
- gaius 14y agoBecause, if you set up sufficient privacy to disassociate yourself from your Bitcoin account, there is no way for the police to tell the difference between "I paid X" and "X stole from me" other than your say-so. It's not as if dusting your keyboard for fingerprints will help...
- kirian 14y agoThat is incorrect, you can prove that you are the owner of the private key that spent the bitcoins if you wish. Anyway this seems like a silly argument, with physical cash how can you prove that you paid X with that cash like in the scenario you outline? My point is that as payments become more and more digital then we must be wary of what that means in terms of data mining and things like that.
- geoka9 14y agoThey also mention going through social media profiles for insurance data mining. I wonder what this practice can lead to, if taken to an extreme. For example, if I apply for credit and I can't provide some/most of the information they ask in the application, my request will probably be denied. Suppose in not so distant future I apply for credit and I don't have any social media accounts. Will I get denied because the bank could not dig enough information about me that they expect to be able to find about their applicants? I don't like the world this social media craze is making us into. Being concerned about your privacy has always been a rule, not an exception. But that is changing now.
- jandrewrogers 14y agoEven if you can't provide some information on an application, they usually already have access to most or all of that information once you give them just a few facts so that they can uniquely identify you. And it takes surprisingly sparse facts to identify individuals for this purpose. They do not make you fill out the application for the information on that application per se; their sources of that info are more reliable. In terms of risk mitigation, they are probably interested in comparing the extensive profile they have of you with what you put on the application. Significant discrepancies would be a reasonable red flag for risk, more so than having incomplete information.
- maxerickson 14y agoThe only way that happens is if social networking behavior is a far better predictor than things like income. That doesn't seem all that likely to me.
- gcb 14y agoAll insurance companies are/will have to spend billions on data mining... ...says the guy who sells data mining.
- kleiba 14y agoIs this so unusual? I try to use my bank cards only at my bank's ATMs to keep profiling to a minimum. Sure, every now and then I end up at a register and discover that I am out of cash. Makes me feel uneasy every time. But it surprises me that this is on the front-page of a tech-savvy community - I thought we were all like that guy anyway.
- jezclaremurugan 14y agoThis article is based on Economist's www.economist.com/node/21556263, reading that would show that the 'data mining exec' pays in cash because data mining software found a correlation between paying in cash and living longer.
- mseebach 14y agoHuh. So the title of the piece should be "Data mining exec doesn't understand the difference between correlation and causation". Which is pretty stupid.
- chris_wot 14y agoIn Australia, divulging this sort of information is against he law.
- beaker 14y agoThe last thing I need is this kind of kruft polluting my brain causing me to continuously second guess myself. I have a hard enough time deciding if a purchase is "business related" or not, now I have to ponder the future implications that every purchase I make will have on my permanent record? Sorry but I can't play this game without encumbering my mind with an amount of stress that completely outweighs any future benefit this bit of clever purchasing discretion would bring. I surrender to our big data overlords and beg for mercy on my consumption footprint. Maybe someday someone will be able to provide a technical defense to all of this nonsense: e.g. http://www.theatlantic.com/technology/archive/2012/06/apple-wants-to-protect-your-identity-by-cloning-you/258873/ http://www.theatlantic.com/technology/archive/2012/06/apple-...
- pasbesoin 14y agoHere's another weakness in all this analysis: The (presumed) value of the data and analysis. For years -- decades -- the medical professions have told us that "salt is bad". Now, we're finally learning that, specific and limited medical conditions or extreme diets aside, this is not so much the case. In fact, to little salt -- even when not "extremely" little -- may present significant problems. Imagine insurers having had purchase/dietary information available during this "salt is bad" phase. How much harm might their resulting "persuasion" have caused? (As a simplistic argument/point.) Taken to extreme, such controls are like "best practices". They can trend towards mono-cultures, which nature shows us tend to be fragile things. Humans need to understand that our population has diversity, that this is a good thing, and that, wedged together in our cities, towns, countries, and onto this blue marble, to some extent we are "all in it together". Like it or not. TL;DR: Some of these data analysis practices should spend more time worrying about their own garden. P.S. I'm not against analysis, in general in life. I am against biased analysis warped by self-serving motivations.