Hit the books: How much this insurance watch discount could really cost you

MMachine learning systems have for years outperformed their human counterparts in everything from Go to Jeopardy! drug discovery and cancer detection. With all the advancements being made in the field, it’s not uncommon for people to be wary of the robots that will replace them in tomorrow’s workforce. These concerns are misplaced, argues Gerd Gigerenzer in his new book How to Stay Smart in a Smart World, if only for a reason other than uncertainty itself. AIs are phenomenally capable machines, but only if they have enough data to act. Introduce the wildly unstable precariousness of human nature into their algorithms and watch their predictive accuracy plummet – otherwise we’d never need to swipe left. In the excerpt below, Gigerenzer discusses the hidden privacy costs of sharing your vehicle’s telematics with the insurance company.

MIT Press

Extract of How to Stay Smart in a Smart World by Gerd Gigerenzer. Published by MIT Press. Copyright © 2021 by Gerd Gigerenzer. All rights reserved.


When your car reports you to the police

If self-driving cars aren’t happening, an alternative seems to be to train humans to use AI as a support system, but stay alert and in control when it fails – the so-called augmented intelligence. This equates to partial automation, i.e. sophisticated versions of level 2 or 3. Yet augmented intelligence involves more than just adding useful features to your car and may well lead us into a future different, where AI is used to both support and monitor us. This possible future depends more on the insurance companies and the police than on the car manufacturers. Its seeds are in telematics.

Young drivers are reckless, overconfident and an insurance risk, according to the stereotype. Some indeed are, but many are not. Nevertheless, insurers often treat them as one group and charge a high premium. Telematics insurance can change that by offering better rates for safe drivers. The idea is to calculate the premium from a person’s actual driving behavior rather than from that of the average driver. For this, a black box that connects to the insurer is installed in the car (using a smartphone is possible and cheaper but less reliable). The black box records driver behavior and calculates a safety score. Figure 4.6 shows the rating system of one of the first telematics insurers. He observes four characteristics and assigns them different weights.

a driver telematics panel

MIT Press

Rapid acceleration or hard braking are assigned the greatest weight, followed by driving beyond the speed limit. Each pilot starts with a monthly budget of 100 points for each of the four features. An “event” causes points to be subtracted, for example 20 points for the first rapid acceleration or for exceeding the speed limit. At the end of the month, the remaining points are weighted as shown and added up to get a total security score. Although telematics is often called black box insurance, the algorithm is not a black box at all like most love algorithms. It is explained in detail on the insurer’s website, and everyone can understand and check the resulting score.

Personalized tariffs are advertised as promoting fairness. To do this, they take into account the individual driving style. But they also create new sources of discrimination when driving at night and in town is sanctioned. Hospital staff, for example, may have little choice but to avoid working at night and in cities. So some features are under the driver’s control, but not all. Interestingly, one driver-controlled feature is missing from virtually all personalized fares: texting while driving.

And the black box that enables fairness also enables surveillance. Consider a possible future. Why should the black box send a speeding statement only to the insurer? A copy to the police would be extremely convenient and save them a lot of effort. It would make all speed cameras obsolete. In case of speeding, the car prints the ticket in time or, more conveniently, automatically deducts the fine from your online account. Your relationship with your beloved car may change. There is a slippery slope between fairness and total surveillance.

Would you be in favor of a new generation of cars that send traffic offenses directly to the police? In a survey I conducted, a third of adults said yes, more among those over sixty and fewer among those under thirty. The technology for this future already exists, as most new cars are equipped with a black box. The data it collects does not belong to the car owner and can be used in court against the driver. In Georgia, police obtained black box data without a warrant after a fatal accident, and the driver was convicted of reckless driving and speeding.

Although the reasons for surveillance vary, digital technology supports them all. It is not even necessary to take out telematics insurance. Modern cars have built-in internet connections and – without this being made transparent in the owner’s manual – most send their automaker whatever data they can collect every two minutes, including where the driver is currently located. , whether hard braking has occurred, how often the position of the driver’s seat has been changed, which gas stations or battery charging stations have been visited and how many CDs and DVDs have been inserted. Plus, as soon as you plug in your smartphone, the car can copy your personal information, including contact addresses, emails, text messages, and even photos. Automakers are remarkably quiet about this activity, and when asked who they share this data with, they usually don’t answer. This information uncovers many other things of interest, such as how often drivers visited McDonald’s, their healthy lifestyles, and who they occasionally visit at night. Connected cars can support justice and improve security but also spy on you. Telematics insurance embodies the double face of digital: surveillance in exchange for comfort.

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About Joey J. Hott

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