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We know where you should live

Thumbnail image for PatCadigan-Worldcon75.jpgIn the memorable panel "We Know Where You Will Live" at the 1996 Computers, Freedom, and Privacy conference, the science fiction writer Pat Cadigan startled everyone, including fellow panelists Vernor Vinge, Tom Maddox, and Bruce Sterling, by suggesting that some time in the future insurance companies would levy premiums for "risk purchases" - beer, junk foods - in supermarkets in real time.

Cadigan may have been proved right sooner than she expected. Last week, John Hancock, a 156-year-old US insurance company, announced it would discontinue underwriting traditional life insurance policies. Instead, in future all its policies will be "interactive"; that is, they will come with the "Vitality" program, under which customers supply data collected by their wearable fitness trackers or smartphones. John Hancock promotes the program, which it says is already used by 8 million customers in 18 countries, and as providing discounts. In the company's characterization, it's a sort of second reward for "living healthy". In the company's depiction, everyone wins - you get lower premiums and a healthier life, and John Hancock gets your data, enabling it to make more accurate risk assessments and increase its efficiency.

Even then, Cadigan was not the only one with the idea that insurance companies would exploit the Internet and the greater availability of data. A couple of years later, a smart and prescient friend suggested that we might soon be seeing insurance companies offer discounts for mounting a camera on the hood of your car so they could mine the footage to determine blame when accidents occurred. This was long before smartphones and GoPros, but the idea of small, portable cameras logging everything goes back at least to 1945, when Vannevar Bush wrote As We May Think, an essay that imagined something a lot like the web, if you make allowances for storing the whole thing on microfilm.

This "interactive" initiative is clearly a close relative of all these ideas, and is very much the kind of thing University of Maryland professor Frank Pasquale had in mind when writing his book The Black Box Society. John Hancock may argue that customers know what data they're providing, so it's not all that black a box, but the reality is that you only know what you upload. Just like when you download your data from Facebook, you do not know what other data the company matches it with, what else is (wrongly or rightly) in your profile, or how long the company will keep penalizing you for the month you went bonkers and ate four pounds of candy corn. Surely it's only a short step to scanning your shopping cart or your restaurant meal with your smartphone to get back an assessment of how your planned consumption will be reflected in your insurance premium. And from there, to automated warnings, and...look, if I wanted my mother lecturing me in my ear I wouldn't have left home at 17.

There has been some confusion about how much choice John Hancock's customers have about providing their data. The company's announcement is vague about this. However, it does make some specific claims: Vitality policy holders so far have been found to live 13-21 years longer than the rest of the insured population; generate 30% lower hospitalization costs; take nearly twice as many steps as the average American; and "engage with" the program 576 times a year.

John Hancock doesn't mention it, but there are some obvious caveats about these figures. First of all, the program began in 2015. How does the company have data showing its users live so much longer? Doesn't that suggest that these users were living longer *before* they adopted the program? Which leads to the second point: the segment of the population that has wearable fitness trackers and smartphones tends to be more affluent (which tends to favor better health already) and more focused on their health to begin with (ditto). I can see why an insurance company would like me to "engage with" its program twice a day, but I can't see why I would want to. Insurance companies are not my *friends*.

At the 2017 Computers, Privacy, and Data Protection, one of the better panels discussed the future for the insurance industry in the big data era. For the insurance industry to make sense, it requires an element of uncertainty: insurance is about pooling risk. For individuals, it's a way of managing the financial cost of catastrophes. Continuously feeding our data into insurance companies so they can more precisely quantify the risk we pose to their bottom line will eventually mean a simple equation: being able to get insurance at a reasonable rate is a pretty good indicator you're unlikely to need it. The result, taken far enough, will be to undermine the whole idea of insurance: if everything is known, there is no risk, so what's the point? betting on a sure thing is cheating in insurance just as surely as it is in gambling. In the panel, both Katja De Vries and Mireille Hildebrandt noted the sinister side of insurance companies acting as "nudgers" to improve our behavior for their benefit.

So, less "We know where you will live" and more "We know where and how you *should* live."


Illustrations: Pat Cadigan (via Wikimedia).

Wendy M. Grossman is the 2013 winner of the Enigma Award. Her Web site has an extensive archive of her books, articles, and music, and an archive of earlier columns in this series. Stories about the border wars between cyberspace and real life are posted occasionally during the week at the net.wars Pinboard - or follow on Twitter.

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