(Hi all, wonderful to become part of this great blog! But now, directly on to some content!)
Imagine that you have a toothache, and a visit at the dentist reveals that a major operation is needed. You phone your health insurance. You listen to the voice of the chatbot, press the buttons to go through the menu. And then you hear: “We have evaluated your profile based on the data you have agreed to share with us. Your dental health behavior scores 6 out of 10. The suggested treatment plan therefore requires a co-payment of [insert some large sum of money here].”
This may sound like science fiction. But many other insurances, e.g. car insurances, already build on automated data being shared with them. If they were allowed, health insurers would certainly like to access our data as well – not only those from smart toothbrushes, but also credit card data, behavioral data (e.g. from step counting apps), or genetic data. If they were allowed to use them, they could move towards segmented insurance plans for specific target groups. As two commentators, on whose research I come back below, recently wrote about health insurance: “Today, public plans and nondiscrimination clauses, not lack of information, are what stands between integration and segmentation.”
If, like me, you’re interested in the relation between knowledge and institutional design, insurance is a fascinating topic. The basic idea of insurance is centuries old – here is a brief summary (skip a few paragraphs if you know this stuff). Because we cannot know what might happen to us in the future, but we can know that on an aggregate level, things will happen to people, it can make sense to enter an insurance contract, creating a pool that a group jointly contributes to. Those for whom the risks in question materialize get support from the pool. Those for whom it does not materialize may go through life without receiving any money, but they still know that they could get support if something happened to them. As such, insurance combines solidarity within a group with individual pre-caution.