Opinion | Insurers Want to Know How Many Steps You Took Today


This isn’t speculative fiction — these are real technologies being deployed by insurance companies right now. Last year, the life insurance company John Hancock began to offer its customers the option to wear a fitness tracker — a wearable device that can collect information about how active you are, how many calories you burn, and how much you sleep. The idea is that your Fitbit or Apple Watch can tell whether or not you’re living the good, healthy life — and if you are, your insurance premium will go down.

This is the cutting edge of the insurance industry, adjusting premiums and policies based on new forms of surveillance. It will affect your life insurance, your car insurance and your homeowner’s insurance — if it hasn’t already. If the Affordable Care Act’s protections for people with pre-existing conditions should vanish, it will no doubt penetrate the health insurance industry as well.

Consumers buy insurance from companies to protect against possible losses. But this contractual relationship is increasingly asymmetrical. The insurance companies once relied on a mix of self-reported information, public records and credit scores to calculate risk and assess how much to charge. But thanks to advances in technology, the capacity to collect, store and analyze information is greater than ever before.

Some of the changes heralded by these new technologies will be better for everyone, like faster claims processing. But the use of data collection and artificial intelligence also raises serious questions about what McKinsey calls “personalized pricing” and what the State Farm patent application calls “personalized recommendations” and “insurance discounts.”

As machine learning works its way into more and more decisions about who gets coverage and what it costs, discrimination becomes harder to spot.

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