The Wall Street Journal just came out with its latest installment on online privacy which I suggest you check out:
http://on.wsj.com/dh7jzs
If last week’s reading didn’t already get you concerned about the privacy issues that can arise from the vast amounts of personal data collected online, this newest article will. Apparently insurance companies are turning to online data to build more accurate models in order to predict your health and longevity. You like McDonalds on Facebook? Maybe we should raise your premium. You installed the jogging app on your iPhone? Maybe you are due for a small discount.
An interesting question this raises though is whether you can game the system, since ultimately the information they have about us online is what we choose to share. You could imagine that if this became a popular method for pricing insurance, people would publicly like health and fitness magazines, and check into salad bars on Foursquare right before walking into a McDonalds to eat. Either way, this really highlights the difficult ethical and privacy issues that we will have to deal with moving forward.
Isn't the biggest problem causing inefficiencies in insurance lack of information?
ReplyDeleteFor those of us that make decisions that would make us lower cost to insure, shouldn't they pay less. And for those of us that make choices that would make us more expensive to insure, shouldn't they pay more?
Speaking of privacy, not looking forward to flying back east for turkey day. With my movember mustache I am going to get felt up.
I guess the concern is how they end up using the information. They can use it to provide better rates to people who lead healthy lifestyles. But, they could also use it to price discriminate in such a way that they extract every last bit of surplus that might be available to consumers. I think that is where the concern is.
ReplyDelete