Auto insurance is being reorganized around real-time driver behavior surveillance

Evidence

Auto insurers are besieged by consultants and would-be technology partners who proffer surveillance capitalistic strategies that promise a new chapter of commercial success. “Uncertainty will be strongly reduced,” intones a McKinsey report on the future of the insurance industry. “This leads to demutualization and a focus on predicting and managing individual risks rather than communities.” A report by Deloitte’s Center for Financial Services counsels “risk minimization”—a euphemism for guaranteed outcomes—through monitoring and enforcing policyholder behavior in real time, an approach called “behavioral underwriting.” “Insurers can monitor policyholder behavior directly,” Deloitte advises, by “recording the times, locations, and road conditions when they drive, whether they rapidly accelerate or drive at high or even excessive speeds, how hard they brake, as well as how rapidly they make turns and whether they use their turn signals.” Telematics produce continuous data flows, so real-time behavioral surplus can replace the traditional “proxy factors,” such as demographic information, that had previously been used to calculate risk. This means that surplus must be both plentiful (economies of scale) and varied (economies of scope) in both range and depth. — Shoshana Zuboff, The Age of Surveillance Capitalism, 666

Categorization

• DEFINE: Introduces ‘behavioral underwriting’ and shows how behavioral surplus replaces proxy factors like demographics.
• ADDENDUM: This ‘euphemism for guaranteed outcomes’ through behavioral monitoring parallels how tamarisk trees and grafting in the grafting piece were underused infrastructure — here monitoring becomes the infrastructure replacing communal risk pooling.
• XREF: connects to: Behavioral risk models make constant tracking structurally necessary for insurers — Nick Couldry & Ulises A. Mejias, The Costs of Connection: How Data Is…, 421; Insurance shifts from mitigating risk to eliminating it via continuous monitoring — Shoshana Zuboff, The Age of Surveillance Capitalism, 668; Traditional industries like insurance now explicitly covet surveillance revenues modeled on Google — Shoshana Zuboff, The Age of Surveillance Capitalism, 664 (+1 more)

Broader Connections

• Traditional industries like insurance now explicitly covet surveillance revenues modeled on Google #corroborates (0.82) — Shoshana Zuboff, The Age of Surveillance Capitalism, 664
• Behavioral-prediction markets recruit merchants and insurers into the surveillance economy. #corroborates (0.80) — Shoshana Zuboff, The Age of Surveillance Capitalism, 1083