Its obvious why this is happening; some form of statistical modeling or AI correlated having a hotmail account with being higher risk.
This is a serious problem with all AI that makes decisions like this. Having a Hotmail account is a symptom of a problem which could lead to higher risk, but it is judging that symptom as if it is a cause which leads to risk.
Its exactly similar to the supposition that black people statistically commit more crime, and thus should pre-emptively receive harsher bail or be profiled. Unless you can scientifically prove that ethnicity causes crime to happen, its disgusting. This is obvious to us.
In year's past, correlation fallacies might have meant that black people were profiled by police more. Today, it means that we build AIs which make life-ending decisions like determining repeat offender risk, visa status, employment decisions, all of which predetermines an unknown outcome by correlating your known qualities with the known outcome of people with similar qualities to you.
We need regulation in place to stop any punitive decision making, public and private, which can be found in court to be based on correlation instead of causation.
I'd say there's a one really important difference between being Black and using Hotmail, and that difference is the same reason why one is a protected class and one isn't.
The real concern here isn't discriminating against people with Hotmail accounts. On the surface level, there's nothing wrong with that. This does become an issue if the property of having a Hotmail account is used as an avenue to discriminate against people based on their membership in a protected class -- a sort of actuarial parallel construction, if you will. At that point, we do have a bit of a problem.
> We need regulation in place to stop any punitive decision making, public and private, which can be found in court to be based on correlation instead of causation.
So, young men could not be charged more for insurance than young women? In fact, young people in general would have to get the same price as everyone else? People in New York would have to pay the same as someone in rural Alaska? Someone who's been driving a year gets charged the same as someone who has been driving fifteen, etc.? Even being in an accident doesn't cause you to get in another accident. It's just correlated with that outcome. Throw out the entire actuarial aspect of insurance? These "punitive" charges are all based on correlation. I don't see this happening.
----
That said, as a non-statistician, I'm interested in what kinds of tests can be run on signals to verify that they're not proxies for selecting and discriminating against protected classes. Is there a way to modify a signal using its correlation with membership in these classes such that you can marginalize the attributes you're not allowed to discriminate based on?
For example, it seems reasonable to believe that hotmail use is correlated with age, race, gender, etc. As an insurance company, I would have information on hand to inform me as to the extent of this correlation, at least among my customer base, and I would in turn know the correlations of those factors with risk. Could I somehow remove the racial, gender, and age components of the Hotmail risk signal to obtain a signal that only conveys the portion of the risk correlation that is not based on those classes? If so, what is that statistical technique called?
> Having a Hotmail account is a symptom of a problem which could lead to higher risk, but it is judging that symptom as if it is a cause which leads to risk.
No, it's not. Insurance is not about establishing causality. Insurance is about assessing risk. If you are correctly assessing risk via proxy signals, you are still correctly predicting the losses that will have to be covered by your insurance, it's completely irrelevant how the losses are causally connected to the signals that you use for the risk assessment. If careless people are more likely to both cause accidents and to have hotmail accounts, then use of a hotmail account does correctly predict an increased risk.
> Its exactly similar to the supposition that black people statistically commit more crime, and thus should pre-emptively receive harsher bail or be profiled.
No, insurance is not about influencing people, it is about assessing risk. Insurance companies ultimately don't care about how much losses they have to cover, they only care about pricing their premiums such that they do have the money to pay for it. Insurance companies don't raise premiums to incentivize people to reduce risk. Insurance companies raise premiums because there are more losses to cover where the risk is higher. That that might also sometimes incentivize people to reduce risk is a side effect, but not an intention of the insurer.
that's sort of how insurance pricing works though. An actuarial process groups you with others based on similar attributes, and works out an overall risk value for you based on the combined risk profiles of the "groups" to which you belong.
Historically, insurance companies only had things like postcode, gender, age, accident history to go off... but they're always interested in other data sets that could be used to modify pricing (or select less risky customers).
Clearly someone or something has identified email domain as a factor (presumably based on data).
> Having a Hotmail account is a symptom of a problem which could lead to higher risk, but it is judging that symptom as if it is a cause which leads to risk.
No, it's not judging that symptom as a cause. It doesn't even matter if it's a cause or a symptom, as long as it is statistically sound. Hotmail, like [not] smoking, [not] exercising, [not] drinking alcohol, is a choice. Having chosen one way or the other does, statistically, imply other things.
Whether we, as a society, want to allow this kind of statistical inference to meaningfully impact things like insurance costs, prison terms and other important decisions is a completely different issue.
What would you define as "scientifically proven"? In general, an observation that is observable, repeatable, and predictive is considered the criteria there. Take for instance genetics. The entire field is, with a few exceptions, built on nothing but correlations. And social science is 100% built on correlations.
If a geneticist were to state that some gene or another were linked to the unibrow [1] would you consider this scientifically dubious? After all, in that case all they did was look at people who have unibrows and look to find characteristics that were more common to this group than others. What if that genetic indicator did show up disproportionately among all people with unibrows and was relatively less common among those without a unibrow?
> Unless you can scientifically prove that ethnicity causes crime to happen, its disgusting.
If someone was to prove such a fact (say, a gene prevalent in some ethnicity that causes propensity for fraud) would you support decision making based on the ethnicity? How about based on the presence of the gene?
I disagree completely. Why does it matter whether it's just correlation or causation?
Let's imagine that being black was actually what caused black people to commit more crimes and this was scientifically proven, how does this make it less bad to discriminate against some black guy who may or may not be a criminal?
From a business perspective, correlation is a good measure and making decisions based on it is perfectly fine (if the correlation is real).
From a moral perspective, it is not OK to discriminate based on correlation or causation.
The distinction between correlation and causation matters when you are attempting to affect the outcome. For example you can't cure someone's sickle cell anemia by painting them white.
>Unless you can scientifically prove that ethnicity causes crime to happen, its disgusting. This is obvious to us.
Whether or not ethnicity is a causal factor is irrelevant. Even if it is a causal factor, it is still an injustice to act on it.
And if you didn't care about justice and just wanted to achieve an optimal prediction, whether or not it's a causal factor doesn't actually matter. Probability theory does not require a causal link.
"If it is rainy then it is cloudy." Is a valid inference despite the fact that rain does not cause clouds.
> We need regulation in place to stop any punitive decision making, public and private, which can be found in court to be based on correlation instead of causation.
Actuarial analysis for insurance to exercise a privilege (i.e. driving) is not something that needs to be more heavily regulated. This is not health care/insurance, food, housing, or other critical necessities.
Correlation is a core part of actuarial science. You'd actually destroy the insurance business if you regulated that into nonexistence as you desire.
I think the troubling aspect here is that these are actually statistically sound decisions. The company does not need to have a strong implication that Hotmail -> bad driver. They only need to know that P(bad driver | Hotmail) > P(bad driver | Gmail). And through some correlation (many of the theories proposed by others seem plausible), this apparently holds.
As developers of these systems, we need to be careful of how we might apply superficial correlations like these, so that we don't cause harm and burden to those who happen to be caught up in them through no fault of their own.
As a side note, I happen to have a 10+ year old Hotmail account that I use for signing up to services. My Gmail address is only given out to real people. Personally, I view it as a testament to my diligence that I have managed to give my email out to hundreds of websites, several of which have had database breaches, and still only see one or two unwanted emails per week.
If insurance were a way to minimize risk by distributing it, differential pricing would be applied only for factors you can influence, to the degree that you can influence them. E.g. if you are a smoker, health insurance would be more expensive, but if you are willing to go into therapy, the insurance would pay for it to save on cancer treatments down the line.
Of course insurance companies are first and foremost trying to maximize their profits by charging everyone just slightly more than their expected payouts [1]. That also means that their profits go up when they get better at modeling someone's risk profile and then charge them more. The whole business model of insurance depends on treating people differently, even if they are different due to no fault of their own.
[1] corollary: if you have enough money, you shouldn't buy insurance (expected loss), but insurance companies (expected profit)
My wife runs a online consumer facing business and her experience is hotmail account users are significantly more of a pain than any other email account type. They seem to be less able to understand instructions - it is a bit of a running joke in our house whenever she complains to me about some painful customer I ask her if they are a hotmail customer.
I can second this. If I get a support email from a hotmail user the first thing I do is to refund them their upgrade payment, because most of the time it is completely hopeless. Another pita with hotmail users is when they click the "Report spam" button on email address confirmation emails ...
What would you rather have? Insurers using broad classes and heuristics about you to put you in a bucket that may not always be fair, or a company like Google who knows about your life to an extreme amount of detail calculating exactly how much risk you pose and providing that to the insurers as a service?
If you don't want to be put by insurers into buckets, well, all I can say is, be careful what you wish for.
Personally, I'd rather car insurance were tailored as individually as possible. If I could get that option without my data ever leaving Google's silo, I would do it in a heartbeat. Then again, I know I'm very low risk compared to most people.
In general, I do think it's good that people pay insurance based on the real risk of loss they pose. I'm fine with this in the case of umbrella insurance, car insurance, home insurance, life insurance, etc. The only exception I have is health insurance, because I don't think people should die of curable illnesses, just because they can't afford treatment.
But if someone poses a high risk of causing a car accident, I prefer that they not be able to drive. If someone is likely to burn their house down (maybe they're into basement welding), they probably should have to pay more to insure it. Insurance companies know that many people would prefer to subject themselves to the panopticon to save money, which is why some of them are starting to offer the option of installing a speed tracker in your car, among other things.
I recognize that this is not everyone's preference of course, but you asked, so I thought I might give you some perspective from someone who thinks differently from you.
I would favour indiviualised pricing and I don't think it would be too hard to achieve without getting too invasive. Basically, your driving record should speak for itself over time.
The problem would be that approach is that insurance companies want to be able to keep an element of fuzziness in their pricing. Predictable pricing is the last thing they want. Why do they only care about beating your current quote, but have no interest in what you were paying for insurance in years gone by? If you have a 10+ year history of perfect driving in dull boring cars, how can insurance companies significantly increase your premium without being able to justify why they suddenly think you are now riskier?
By putting people in buckets they can adjust prices without singling anyone out, and as a by product keep the consume a bit confused abut what is going on.
I see it happening all the time. Drivers with no claims, no points, no convictions and who drive safe, dull dull cars suddenly having the premiums increased. Its not because of them or what they did, its because the insurance company decided to put them in a bucket that justified a price hike.
I would like car insurers to be only allowed to ask a limited white-listed list of options:
* Address
* Where you keep your car
* Typical mileage
* Car model & age
That's probably it. In addition they shouldn't be allowed to use age as a discriminator (we don't do that for National Insurance in the UK and it works well).
It's ridiculous that they ask for things like your job and your marital status.
Considering drivers are legally required to have insurance, the insurers should at minimum be legally required to provide a readable itemized explanation for their cost decision. I.e. this accident was factored in this much, your email domain was factored in this much, your race was factored in this much, etc. In other words, they should be required to explain the full details of whatever model they are using.
Also potentially the actual variables allowed in this computation should be white-listed by regulators. I.e. you can't use email domains because they were never allowed in the first place.
All of this could be considered "anti-innovation" or whatever, but I see it as the minimal consumer protection that should be provided for a service that drivers may *not skip.
I have no clue about what it takes to run a profitable insurance business, so no opinion on the soundness of that practice.
But I certainly do use metadata about people's communication in my general assessment of their relevance, trustfulness, clue level, etc. Do you use a Hotmail address? Well then, you really are out of it. Gmail? A lot sleaker, yes, but our conversation will be under third party scrutiny, and chances are that you haven't thought that part of it through. Your work mail for a private correspondance? I wouldn't do that in a million years, so yeah, your total score just went down a notch. Is that an Outlook client I see you're using? Fine, but sort of humdrum, and you are probably the kind of person who will send me .docx documents to read, and make a fuss when you get them back, formatting screwed up. And so on and so forth, most of it subconscious, but the evaluations stick, and mostly turn out to be accurate.
And yes, I have made first sortings of job applicants on the the same kind of criteria.
Someone with a HotMail account has managed to keep a consistent address for about twenty years. That is a good thing. The idea that they should ditch HotMail for the functionally equivalent GMail just because GMail is popular is, of course, idiotic.
But this is an insurance company, so it is plausible that they crunched the numbers and found a real effect.
I still log into my old Hotmail account every few months just to keep it from getting deleted. It’s a complete piece of shit, it’s not even usable let alone comparable in any way to gmail.
Here's a bonus messed up way of discriminating that auto insurance companies do.
The minimum liability coverage in many states is $10K. However, every major insurance company insists they always recommend $100K. The average liability claim in an auto accident is around $15K.
However, if you look at that and think, hey, I have liquid funds, $10K - $100K isn't that big a gap for me, and if $15K is the average then $10K seems like a pretty good economic level.
Guess what? The insurance companies have decided that having the minimum $10K worth of coverage means that you are exhibiting high risk behavior and you get to pay more if you ever want to increase that compared to those who already have it, say to $25K when you get married and your wife is more nervous about it.
Oh, you want to shop around do you? Well they also target other insurance companies who primarily market themselves as selling those $10K policies that the larger companies refuse to write. Your high-risk tag will hit if you are coming from one of those (like the General) regardless of your coverage.
I'll repeat that in case its unclear. I have to pay more for my legally required insurance because I didn't want to buy more than what I am legally required to buy. I am being punished because I didn't buy what they preferred to sell me from the companies they preferred me to buy it from.
But once I behave "correctly", by paying more for a policy from one of the correct insurance companies with the arbitrary minimum the insurance companies prefer, they will bless me by removing my high-risk tag after 6 months. Thanks.
rant: another weird symptom of the world rapidly turning into shit.
It seems like more knowledge only makes the world worse. For a consumer there is very very very little benefit of corporations knowing anything about you.
The entire concept of insurance is to lessen the financial impact of an unfortunate event by everyone contributing a smaller amount. Fighting against this principle is insurance companies that want to keep accepting money but really don't want to hand it out again. To do this they will disadvantage anyone who is more likely to need their money. Some things make sense, maybe smokers should pay more for health insurance but with more and more data mining they will be able to find trends where people that do X might be 0.001% more likely to claim and will therefore charge them more. If you happen to also do X you will pay more even if you yourself arn't more likely to claim. and when they chuck ML/AI into the mix to look for trends it will just get worse.
More worryingly, they also appear to be using first name to influence insurance prices. Which is problematic, since first name correlates with race. See: https://news.ycombinator.com/item?id=16212991
Frankly maybe they should just be allowed to charge differential prices based on race. If race correlates with different insurance outcomes for some reason then covering up the symptoms doesn't change anything, the same link might just end up being discovered by an ML system via other signals. I've seen ML repeatedly discover inconvenient truths in other (non individual related) contexts and suppressing the feature it was using to make the connection just caused it to find worse equivalents based on combinations of other features.
My sympathy is somewhat limited because in recent times it feels like there's plenty of explicit racism in the world against whites, like the BBC constantly posting internships and job ads that specifically forbid white people from applying. If western societies have somehow concluded that it's OK to engage in that sort of thing, then why shouldn't race be a factor in insurance contributions? At least that has some sort of coherent argument for why it's a good thing (more accurate premiums for everyone).
I would not be surprised if there is a correlation between maintaining a hotmail or yahoo account and poor decision-making impacting one's driving record.
I received an email from Admiral yesterday, which seems related but not completely:
"""
You may have seen a story in the news which claims we use customers' names to price our insurance based on race. This is 100% not the case and we do not, and have never, used this information to provide a price to our customers. I'm sorry if this story has caused you any concerns.
To offer our prices we use a complex rating structure and rate on many different variables and data sources. The journalists have misunderstood our pricing structure and the insurance quotes in the story are not like for like.
This email is to offer you an explanation of the press story and to offer my apologies for any concern caused. There is no need for you to take any action.
"""
Not sure which story that's referring to; seems somewhat different to (and much worse than) this one.
On a slightly different note: that old "trick" of adding an experienced driver to one's insurance has always seemed a bit odd to me. And as a 36-year-old, I have to say I'd assumed I was already past the point of its applicability. But I had cause to add my mother to an Admiral policy this week, and was very surprised to discover that adding her would give me a refund.
The quote system asks if your car has anything added to it, like roof racks, spoilers, tow bar, body kit. You go "Oh yeah, a tow bar" thinking crap this will cost extra and their backend correlation engine figures "tow bar, probably caravan trailer, old boring safe driver, low risk" and you get a discount.
The UK government gave insurers direct electronic access to driving license records. If you tell them your details they can instantly check if you've got points, or have been disqualified from driving. Insurers ask for your license details. To use the government database right? Nope, that's a bunch of expensive R&D, if you make it optional, people with bad records just say they don't know their license number, charge them more. Simple, no extra R&D needed.
Please correct me if I am wrong, but as far as I can tell there is no advantage to the insurers, with respect only to the returns on policies, in producing accurate assessments of individual risk levels, as compared with only accurately assessing the aggregate risk level - the expected return is the same either way (and I would imagine that the individualised assessment is much more challenging).
Assuming I am correct about that, then the advantage to them of providing individualised premiums is to appear competitive in the market place, by being able to confidently match their premiums to individual risk levels, and thus being able to advertise (the possibility of) lower premiums.
Again assuming all of that is true, then there really isn't any net benefit - in fact presumably we have to pay for this whole individualised risk assessment exercise, which will actually raise the total costs.
More speculatively, I imagine that their job is made somewhat easier by cognitive biases that cause people to think, on average, that they are better than average at (for example) driving.
I've actually modeled email domain as a feature in a regression model of customer spending habits. We were all surprised to find it is a very predictive signal!
Of course insurance companies want to use every signal available to them to price discriminate on rates. If you are a good driver, the insurance company wants you because you are unlikely to file claims. Likewise, you are happy to receive a discount for being a good driver. A simple signal of being a good driver is your driving record, but we all know this isn't very reliable by itself. So you end up with other signals being used. Literally any signal that is not protected (like race/gender) will get used in any insurance model. None of this is new. The color of your car is used surely, so why is it so shocking that your email domain is used as well?
Compared to some of the antics we had with Direct Line, Admiral have been really good - not had any serious problems and when my wife crashed my car last year they looked after everything pretty well.
If you're an awful company, you surely need to make sure that your data is more accurate than the competition. It's like running an awful store, it's doable with prices low enough.
[+] [-] 013a|8 years ago|reply
This is a serious problem with all AI that makes decisions like this. Having a Hotmail account is a symptom of a problem which could lead to higher risk, but it is judging that symptom as if it is a cause which leads to risk.
Its exactly similar to the supposition that black people statistically commit more crime, and thus should pre-emptively receive harsher bail or be profiled. Unless you can scientifically prove that ethnicity causes crime to happen, its disgusting. This is obvious to us.
In year's past, correlation fallacies might have meant that black people were profiled by police more. Today, it means that we build AIs which make life-ending decisions like determining repeat offender risk, visa status, employment decisions, all of which predetermines an unknown outcome by correlating your known qualities with the known outcome of people with similar qualities to you.
We need regulation in place to stop any punitive decision making, public and private, which can be found in court to be based on correlation instead of causation.
[+] [-] discoursism|8 years ago|reply
The real concern here isn't discriminating against people with Hotmail accounts. On the surface level, there's nothing wrong with that. This does become an issue if the property of having a Hotmail account is used as an avenue to discriminate against people based on their membership in a protected class -- a sort of actuarial parallel construction, if you will. At that point, we do have a bit of a problem.
> We need regulation in place to stop any punitive decision making, public and private, which can be found in court to be based on correlation instead of causation.
So, young men could not be charged more for insurance than young women? In fact, young people in general would have to get the same price as everyone else? People in New York would have to pay the same as someone in rural Alaska? Someone who's been driving a year gets charged the same as someone who has been driving fifteen, etc.? Even being in an accident doesn't cause you to get in another accident. It's just correlated with that outcome. Throw out the entire actuarial aspect of insurance? These "punitive" charges are all based on correlation. I don't see this happening.
----
That said, as a non-statistician, I'm interested in what kinds of tests can be run on signals to verify that they're not proxies for selecting and discriminating against protected classes. Is there a way to modify a signal using its correlation with membership in these classes such that you can marginalize the attributes you're not allowed to discriminate based on?
For example, it seems reasonable to believe that hotmail use is correlated with age, race, gender, etc. As an insurance company, I would have information on hand to inform me as to the extent of this correlation, at least among my customer base, and I would in turn know the correlations of those factors with risk. Could I somehow remove the racial, gender, and age components of the Hotmail risk signal to obtain a signal that only conveys the portion of the risk correlation that is not based on those classes? If so, what is that statistical technique called?
[+] [-] zAy0LfpBZLC8mAC|8 years ago|reply
No, it's not. Insurance is not about establishing causality. Insurance is about assessing risk. If you are correctly assessing risk via proxy signals, you are still correctly predicting the losses that will have to be covered by your insurance, it's completely irrelevant how the losses are causally connected to the signals that you use for the risk assessment. If careless people are more likely to both cause accidents and to have hotmail accounts, then use of a hotmail account does correctly predict an increased risk.
> Its exactly similar to the supposition that black people statistically commit more crime, and thus should pre-emptively receive harsher bail or be profiled.
No, insurance is not about influencing people, it is about assessing risk. Insurance companies ultimately don't care about how much losses they have to cover, they only care about pricing their premiums such that they do have the money to pay for it. Insurance companies don't raise premiums to incentivize people to reduce risk. Insurance companies raise premiums because there are more losses to cover where the risk is higher. That that might also sometimes incentivize people to reduce risk is a side effect, but not an intention of the insurer.
[+] [-] ra|8 years ago|reply
Historically, insurance companies only had things like postcode, gender, age, accident history to go off... but they're always interested in other data sets that could be used to modify pricing (or select less risky customers).
Clearly someone or something has identified email domain as a factor (presumably based on data).
[+] [-] beagle3|8 years ago|reply
No, it's not judging that symptom as a cause. It doesn't even matter if it's a cause or a symptom, as long as it is statistically sound. Hotmail, like [not] smoking, [not] exercising, [not] drinking alcohol, is a choice. Having chosen one way or the other does, statistically, imply other things.
Whether we, as a society, want to allow this kind of statistical inference to meaningfully impact things like insurance costs, prison terms and other important decisions is a completely different issue.
[+] [-] indubitable|8 years ago|reply
If a geneticist were to state that some gene or another were linked to the unibrow [1] would you consider this scientifically dubious? After all, in that case all they did was look at people who have unibrows and look to find characteristics that were more common to this group than others. What if that genetic indicator did show up disproportionately among all people with unibrows and was relatively less common among those without a unibrow?
[1] - https://www.nature.com/articles/ncomms10815
[+] [-] ggg9990|8 years ago|reply
If someone was to prove such a fact (say, a gene prevalent in some ethnicity that causes propensity for fraud) would you support decision making based on the ethnicity? How about based on the presence of the gene?
[+] [-] fpig|8 years ago|reply
Let's imagine that being black was actually what caused black people to commit more crimes and this was scientifically proven, how does this make it less bad to discriminate against some black guy who may or may not be a criminal?
From a business perspective, correlation is a good measure and making decisions based on it is perfectly fine (if the correlation is real).
From a moral perspective, it is not OK to discriminate based on correlation or causation.
The distinction between correlation and causation matters when you are attempting to affect the outcome. For example you can't cure someone's sickle cell anemia by painting them white.
[+] [-] zardo|8 years ago|reply
Whether or not ethnicity is a causal factor is irrelevant. Even if it is a causal factor, it is still an injustice to act on it.
And if you didn't care about justice and just wanted to achieve an optimal prediction, whether or not it's a causal factor doesn't actually matter. Probability theory does not require a causal link.
"If it is rainy then it is cloudy." Is a valid inference despite the fact that rain does not cause clouds.
[+] [-] imjustsaying|8 years ago|reply
That's not how the scientific method works.
[+] [-] AFNobody|8 years ago|reply
Actuarial analysis for insurance to exercise a privilege (i.e. driving) is not something that needs to be more heavily regulated. This is not health care/insurance, food, housing, or other critical necessities.
Correlation is a core part of actuarial science. You'd actually destroy the insurance business if you regulated that into nonexistence as you desire.
[+] [-] Libturd|8 years ago|reply
[deleted]
[+] [-] Wehrdo|8 years ago|reply
As developers of these systems, we need to be careful of how we might apply superficial correlations like these, so that we don't cause harm and burden to those who happen to be caught up in them through no fault of their own.
As a side note, I happen to have a 10+ year old Hotmail account that I use for signing up to services. My Gmail address is only given out to real people. Personally, I view it as a testament to my diligence that I have managed to give my email out to hundreds of websites, several of which have had database breaches, and still only see one or two unwanted emails per week.
[+] [-] yorwba|8 years ago|reply
Of course insurance companies are first and foremost trying to maximize their profits by charging everyone just slightly more than their expected payouts [1]. That also means that their profits go up when they get better at modeling someone's risk profile and then charge them more. The whole business model of insurance depends on treating people differently, even if they are different due to no fault of their own.
[1] corollary: if you have enough money, you shouldn't buy insurance (expected loss), but insurance companies (expected profit)
[+] [-] tuna-piano|8 years ago|reply
Or those from a certain zip code who are charged more? [2]
Or those who drive a certain car model who are charged more? [3]
How is email address any different?
[1] https://www.nerdwallet.com/blog/insurance/teen-boys-high-car...
[2] http://www.latimes.com/business/autos/la-fi-hy-ten-worst-zip...
[3] https://electrek.co/2017/06/05/tesla-owners-insurance-rates/
[+] [-] craftyguy|8 years ago|reply
Well, for one, correlation != causation. Period.
[+] [-] danieltillett|8 years ago|reply
[+] [-] tobltobs|8 years ago|reply
[+] [-] kinkrtyavimoodh|8 years ago|reply
If you don't want to be put by insurers into buckets, well, all I can say is, be careful what you wish for.
[+] [-] discoursism|8 years ago|reply
In general, I do think it's good that people pay insurance based on the real risk of loss they pose. I'm fine with this in the case of umbrella insurance, car insurance, home insurance, life insurance, etc. The only exception I have is health insurance, because I don't think people should die of curable illnesses, just because they can't afford treatment.
But if someone poses a high risk of causing a car accident, I prefer that they not be able to drive. If someone is likely to burn their house down (maybe they're into basement welding), they probably should have to pay more to insure it. Insurance companies know that many people would prefer to subject themselves to the panopticon to save money, which is why some of them are starting to offer the option of installing a speed tracker in your car, among other things.
I recognize that this is not everyone's preference of course, but you asked, so I thought I might give you some perspective from someone who thinks differently from you.
[+] [-] DoubleGlazing|8 years ago|reply
The problem would be that approach is that insurance companies want to be able to keep an element of fuzziness in their pricing. Predictable pricing is the last thing they want. Why do they only care about beating your current quote, but have no interest in what you were paying for insurance in years gone by? If you have a 10+ year history of perfect driving in dull boring cars, how can insurance companies significantly increase your premium without being able to justify why they suddenly think you are now riskier?
By putting people in buckets they can adjust prices without singling anyone out, and as a by product keep the consume a bit confused abut what is going on.
I see it happening all the time. Drivers with no claims, no points, no convictions and who drive safe, dull dull cars suddenly having the premiums increased. Its not because of them or what they did, its because the insurance company decided to put them in a bucket that justified a price hike.
[+] [-] IshKebab|8 years ago|reply
* Address * Where you keep your car * Typical mileage * Car model & age
That's probably it. In addition they shouldn't be allowed to use age as a discriminator (we don't do that for National Insurance in the UK and it works well).
It's ridiculous that they ask for things like your job and your marital status.
[+] [-] CogitoCogito|8 years ago|reply
Also potentially the actual variables allowed in this computation should be white-listed by regulators. I.e. you can't use email domains because they were never allowed in the first place.
All of this could be considered "anti-innovation" or whatever, but I see it as the minimal consumer protection that should be provided for a service that drivers may *not skip.
[+] [-] interfixus|8 years ago|reply
But I certainly do use metadata about people's communication in my general assessment of their relevance, trustfulness, clue level, etc. Do you use a Hotmail address? Well then, you really are out of it. Gmail? A lot sleaker, yes, but our conversation will be under third party scrutiny, and chances are that you haven't thought that part of it through. Your work mail for a private correspondance? I wouldn't do that in a million years, so yeah, your total score just went down a notch. Is that an Outlook client I see you're using? Fine, but sort of humdrum, and you are probably the kind of person who will send me .docx documents to read, and make a fuss when you get them back, formatting screwed up. And so on and so forth, most of it subconscious, but the evaluations stick, and mostly turn out to be accurate.
And yes, I have made first sortings of job applicants on the the same kind of criteria.
[+] [-] zdfjkhiuj|8 years ago|reply
But this is an insurance company, so it is plausible that they crunched the numbers and found a real effect.
[+] [-] Alex3917|8 years ago|reply
[+] [-] JauntyHatAngle|8 years ago|reply
I think the "functionally equivalent" part is quite arguable, at least it was in the past when many techies made the switch from hotmail to gmail.
People switched because the features and interface were far superior.
[+] [-] sniglom|8 years ago|reply
Say, driving a 20 year old car even though there are safer alternatives available.
[+] [-] acct1771|8 years ago|reply
[+] [-] vbrendel|8 years ago|reply
[+] [-] philipodonnell|8 years ago|reply
The minimum liability coverage in many states is $10K. However, every major insurance company insists they always recommend $100K. The average liability claim in an auto accident is around $15K.
However, if you look at that and think, hey, I have liquid funds, $10K - $100K isn't that big a gap for me, and if $15K is the average then $10K seems like a pretty good economic level.
Guess what? The insurance companies have decided that having the minimum $10K worth of coverage means that you are exhibiting high risk behavior and you get to pay more if you ever want to increase that compared to those who already have it, say to $25K when you get married and your wife is more nervous about it.
Oh, you want to shop around do you? Well they also target other insurance companies who primarily market themselves as selling those $10K policies that the larger companies refuse to write. Your high-risk tag will hit if you are coming from one of those (like the General) regardless of your coverage.
I'll repeat that in case its unclear. I have to pay more for my legally required insurance because I didn't want to buy more than what I am legally required to buy. I am being punished because I didn't buy what they preferred to sell me from the companies they preferred me to buy it from.
But once I behave "correctly", by paying more for a policy from one of the correct insurance companies with the arbitrary minimum the insurance companies prefer, they will bless me by removing my high-risk tag after 6 months. Thanks.
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] jimjimjim|8 years ago|reply
It seems like more knowledge only makes the world worse. For a consumer there is very very very little benefit of corporations knowing anything about you.
The entire concept of insurance is to lessen the financial impact of an unfortunate event by everyone contributing a smaller amount. Fighting against this principle is insurance companies that want to keep accepting money but really don't want to hand it out again. To do this they will disadvantage anyone who is more likely to need their money. Some things make sense, maybe smokers should pay more for health insurance but with more and more data mining they will be able to find trends where people that do X might be 0.001% more likely to claim and will therefore charge them more. If you happen to also do X you will pay more even if you yourself arn't more likely to claim. and when they chuck ML/AI into the mix to look for trends it will just get worse.
[+] [-] isp|8 years ago|reply
[+] [-] peoplewindow|8 years ago|reply
My sympathy is somewhat limited because in recent times it feels like there's plenty of explicit racism in the world against whites, like the BBC constantly posting internships and job ads that specifically forbid white people from applying. If western societies have somehow concluded that it's OK to engage in that sort of thing, then why shouldn't race be a factor in insurance contributions? At least that has some sort of coherent argument for why it's a good thing (more accurate premiums for everyone).
[+] [-] north_east_dev|8 years ago|reply
[+] [-] megaman22|8 years ago|reply
[+] [-] andrewaylett|8 years ago|reply
"""
You may have seen a story in the news which claims we use customers' names to price our insurance based on race. This is 100% not the case and we do not, and have never, used this information to provide a price to our customers. I'm sorry if this story has caused you any concerns.
To offer our prices we use a complex rating structure and rate on many different variables and data sources. The journalists have misunderstood our pricing structure and the insurance quotes in the story are not like for like.
This email is to offer you an explanation of the press story and to offer my apologies for any concern caused. There is no need for you to take any action.
"""
Not sure which story that's referring to; seems somewhat different to (and much worse than) this one.
On a slightly different note: that old "trick" of adding an experienced driver to one's insurance has always seemed a bit odd to me. And as a 36-year-old, I have to say I'd assumed I was already past the point of its applicability. But I had cause to add my mother to an Admiral policy this week, and was very surprised to discover that adding her would give me a refund.
[+] [-] tialaramex|8 years ago|reply
The quote system asks if your car has anything added to it, like roof racks, spoilers, tow bar, body kit. You go "Oh yeah, a tow bar" thinking crap this will cost extra and their backend correlation engine figures "tow bar, probably caravan trailer, old boring safe driver, low risk" and you get a discount.
The UK government gave insurers direct electronic access to driving license records. If you tell them your details they can instantly check if you've got points, or have been disqualified from driving. Insurers ask for your license details. To use the government database right? Nope, that's a bunch of expensive R&D, if you make it optional, people with bad records just say they don't know their license number, charge them more. Simple, no extra R&D needed.
[+] [-] KozmoNau7|8 years ago|reply
[+] [-] mxuribe|8 years ago|reply
[+] [-] mrow84|8 years ago|reply
Assuming I am correct about that, then the advantage to them of providing individualised premiums is to appear competitive in the market place, by being able to confidently match their premiums to individual risk levels, and thus being able to advertise (the possibility of) lower premiums.
Again assuming all of that is true, then there really isn't any net benefit - in fact presumably we have to pay for this whole individualised risk assessment exercise, which will actually raise the total costs.
More speculatively, I imagine that their job is made somewhat easier by cognitive biases that cause people to think, on average, that they are better than average at (for example) driving.
[+] [-] beagle3|8 years ago|reply
[0] https://consumerist.com/2010/11/01/capital-one-made-me-diffe...
[+] [-] mnw21cam|8 years ago|reply
[+] [-] tjpaudio|8 years ago|reply
Of course insurance companies want to use every signal available to them to price discriminate on rates. If you are a good driver, the insurance company wants you because you are unlikely to file claims. Likewise, you are happy to receive a discount for being a good driver. A simple signal of being a good driver is your driving record, but we all know this isn't very reliable by itself. So you end up with other signals being used. Literally any signal that is not protected (like race/gender) will get used in any insurance model. None of this is new. The color of your car is used surely, so why is it so shocking that your email domain is used as well?
[+] [-] lunulata|8 years ago|reply
[+] [-] CornishPasty|8 years ago|reply
[+] [-] DoubleGlazing|8 years ago|reply
https://www.theguardian.com/technology/2016/nov/02/admiral-t...
Thankfully, facebook put a stop to it. But if they hadn't I'm certain it would have become a common practice.
[+] [-] arethuza|8 years ago|reply
[+] [-] sniglom|8 years ago|reply