Predictive analytics may make insurance less socially fair. Seems great to know who is likely to default on a loan/get sick/crash their car. But if you knew perfectly, then it wouldn't be insurance at all -- no redistribution of risk. Partial knowledge means less redistribution.
That’s interesting, thanks. This is (yet another) a major issue we haven’t grappled with. There is apparently a forthcoming book on the history of some of this, by Caley Horan. https://www.wired.com/story/ideas-joi-ito-insurance-algorithms/ …
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Fascinating, thanks. OTOH that paper discusses evidence that online lending has reduced discrimination -- and unjustified differences in availability and costs -- by reducing the scope of human loan officers.
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I can see both operating at the same time.
End of conversation
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