Insurance shifts from mitigating risk to eliminating it via continuous monitoring

Evidence

As certainty replaces uncertainty, premiums that once reflected the necessary unknowns of everyday life can now rise and fall from millisecond to millisecond, informed by the precise knowledge of how fast you drive to work after an unexpectedly hectic early morning caring for a sick child or if you perform wheelies in the parking lot behind the supermarket. “We know that 16-year old drivers have a whole lot of accidents… but not every 16-year old is a lousy driver,” observes one insurance industry telematics expert. Rates based on actual behavior are “a big advantage in being able to price appropriately.” This kind of certainty means that insurance contracts designed to mitigate risk now give way to machine processes that respond “almost immediately” to nuanced infractions of prescribed behavioral parameters and thus substantially decrease risk or eliminate it entirely. — Shoshana Zuboff, The Age of Surveillance Capitalism, 668

Categorization

• SEED: Angle: surveillance capitalism converts insurance from a social solidarity institution into an individualized behavioral-control mechanism — the end of pooled risk.
• 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; Securitization converts uncertainty into quantifiable, tradeable risk and shapes daily life — Max Haiven, Cultures of Financialization, 248; Continuous dynamic hedging can eliminate all risk, not just systematic risk. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 599 (+5 more)

Broader Connections

• Auto insurance is being reorganized around real-time driver behavior surveillance #expands (0.85) — Shoshana Zuboff, The Age of Surveillance Capitalism, 666
• Protection sellers need continuous information on clients to gauge reliability #expands (0.80) — Diego Gambetta, The Sicilian Mafia The Business of…, 94
• Walmart’s power operates through securitization linking financial risk management to surveillance #expands (0.75) — Max Haiven, Cultures of Financialization, 558