The issue is that often the data gathered and used with no consideration of other evidence. For example, I had a similar situation of home insurance sending a letter demanding I replace my roof based on drone footage. No issue was immediately obvious from the footage and we had just replaced the roof less than 5 years earlier. We had an inspection done and then sent both proof of replacement and the inspection report. We were told the drone footage alone would be used in their decision, and we still had to replace the roof to keep coverage.

So it is not necessarily objective, fairly considered observations (and I think pretty different from speeding tickets). At least in our case it was maximally for the benefit of the insurer. I think that is relevant to their claimed premise.

> pricing (or making available) coverage based upon risk.

The whole point of insurance is to manage risk by spreading it across all consumers. If my insurance rates go up based on my usage or individual risk factors, it’s just an elaborate money making scheme. It should be like “everyone has to pay x to get insurance to get covered and if the claims start going up, everyone has to pay more”.

> This is not much different from an auto insurance company raising your rates (or cancelling coverage) because you've received a number of speeding tickets

This is more like your insurer following you around and evaluating your driving skills.

And yes black boxes are a thing but a) are opt-in and b) universally reviled.

The problem is that every facet they add to the analysis increases the complexity, making it harder to price risk - meaning they'll eagerly overprice [0] (based on "what if") with some idea that "the market" (ie nobody) will sort it out. This creates a race to the bottom against anything that might seem "weird", aka regular people just living their lives (while being put under a microscope), similar to how the ever growing housing bubble has painted most houses beige.

Your bushes only seem like a reasonable example because you are looking at them in isolation - it was only a single issue you had to deal with, and something you seemingly wanted to deal with anyway. If they had instead blasted you with a litany of different issues, or a bush that you wanted to keep for sentimental reasons, or you simply didn't have the time/resources to create your own counter-documentation and operate their heavyweight bureaucracy, you'd be singing a much different tune.

And while these things can happen anyway with regular in-person home inspections, the point is that increasing surveillance and unaccountable "AI" make it much easier to bury customers in a deluge of complexity making for even-less-competitive markets.

(I would give a healthy list of examples of my own home being deficient in many ways an insurance inspector would call out yet are in the process of being managed, but I'm sure it would just invite a lot of "well ackshually that's dangerous and weird!" out of touch responses from people whose first instinct is to call someone rather than to fix something themselves)

[0] Notice how they weren't going to raise your premiums by $30 a year or whatever, but outright cancel your policy - in other words a massive overweighting of the actual risk from some bushes growing into the house.

Vegetation as the enemy, that is a sad consequence.

> While there are certainly some issues of concern in the article and the reviewed book, the above seems like exactly what insurance companies should be doing: pricing (or making available) coverage based upon risk.

I mean, it's good for the insurance company to help it make more profit, but it undermines the arrangement of how insurance works, so I would argue it's not what they should be doing from a societal perspective, and there should be regulation that stops them doing that.

If you take it to the extreme of them being able to tell with 100% certainty who's going to need a payout when, they'll just arrange it so they'll never need to pay out. They'll not do or stop doing contracts with those that will need a payout, or they'll raise the premiums such that they still gain. Insurance would become pointless and customers are better off saving for their own expenses.[1]

I've made this comment before. I'll just quote myself on the basics of how insurance works, to make this point clear:

https://news.ycombinator.com/item?id=49820825

> With regards to insurance, that industry depends on ignorance. If an insurance company had perfect information (psychic, precognition level) on who's going to need a payout when and who's never, then the point of the insurance becomes nil. They're not going to enter contracts with individuals that result in a net loss, only with those that result in a net gain. That can look like them just raising prices until it results in a gain. If that's the case, people can just save and use their own money to cover the events that will happen, because insurance would not be of any benefit to anyone at all.

> The way insurance works on a basic level is they know a percentage of people will have a set of events happen to them, but they don't know who. They have a large amount of clientele and charge everyone such that the revenue can cover the expenses of the unlucky percentage of their clientele and make a profit. To the individual, the insurance expense results in significantly less than what they would pay would they be part of the unlucky percentage without the insurance cover.

> The arrangement is founded on the ignorance of who belongs to the unlucky percentage. The economics of insurance don't work without the ignorance. So yeah, at some point, algorithmic pricing of insurance likely ought to be banned if we still want insurance to exist on a meaningful level.

[1] As a parenthesis, it being better to save is in a closed system sort of way. In reality, the fact that a lot of people would still get insurance because "that's responsible" means end providers can raise their prices on the assumption that most of their customers are the insurance companies and insurance companies "are rich", so there would still be a price difference. That's kind of what you see with health insurance where people that are not insured can get lower prices than those that are, such that it may end up even cheaper than the copay. That's for example, kinda what can be seen with styropyro's healthcare story:

https://www.youtube.com/watch?v=1162ouPHH3Q

> 5:39 so my insurance denies the CAT scan right I mean that's a really really common move for health insurance they just like to blanket deny procedures

> 6:21: but uh but the stupid part is is then I got billed $3,300 for that scan with insurance and the even dumber part is that I I got a quote from my clinic on what it would cost me without insurance and it was only $1,400 so because I have this insurance it actually cost me more money to get this scan like how is that how is that even possible that is the stupidest thing in the world

I imagine he can't see it because of the stress and anger, but that's probably exactly why the insurance denied it, because they were being billed way to high by the provider. If the provider billed the company what they billed regular people, they likely wouldn't deny them at the start. There's a limit to what anyone can pay, even insurance companies, and they have to put a stop at some point.

Back to the original point, imagine what that looks like with end providers that don't provide separate pricing between the insured and the non-insured, and where most people have insurance. The end provider would just give the higher pricing, the one for presumably rich insurance companies, so you'd still would save money with the insurance despite the fact that you'd save even more if the insurance companies didn't exist.

Anyway, this is a separate problem from insurance companies investigating too much and undermining how insurance works for their own profit.

Which is why we're entering that fun stage of capitalism where the winners have won enough that they just buy up any possible competition in the market, and regulators absolutely fail to enforce any sort of anti-trust/anti-monopoly measures because they're just another thing that's been bought up.

Nothing like

- Major bank consolidation

- Major media condolidation

- Major tech consolidation

- Major grocery store consolidation

etc... to really provide wonderful competitive options.

It is changing. It's accelerating, spreading, and getting worse all the time.

All of this is GosPlan with extra steps anyways. It works better with those extra steps and makes people believe too, so I can't complain

“Drones are racist, just like clear nail polish and white paint (ah and math)”

You mean like withholding units from the market to overcharge renters when there’s people sleeping on the streets? Totally fine.

It was not the efficient algorithm, but the pooling of the data that was considered to be collusion.