The Uncanny Valley: It’s a Nice Place to Visit, But You Wouldn’t Want to Live There
From How a Creepy Car Insurance Idea Could Save Thousands of Lives (and the Planet) at The Atlantic:
“Lots of markets deal with some kind of market failure, and car insurance is no exception. Insurers have a big problem. They know a lot about us, but they don’t know a lot about how we drive. Sure, they know when we get tickets or when we get into fender benders, but they don’t know how much or how fast or how aggressively or how attentively we drive. They have to use proxies like age, sex, marital status and where we live to price policies. The end result are higher premiums than most of us should be paying.
“But now there’s a solution for those 93 percent of drivers who think they’re above average. As Randall Strossof the New York Times reports, car insurance companies are offering customers a trade: less privacy for lower premiums. Drivers who install a monitoring device that records when, how far, and how fast they drive — but not where — are eligible for discounts of up to 30 percent. The average saving from Progressive, which pioneered the program, is 10 percent. Other insurers are getting in on it too.” (Emphasis added.)
The post is illustrated with the same image of Progressive Insurance’s “Flo” character that I’ve used, and seems to imply that Progressive Insurance’s “Snapshot Product” monitors drivers’ speed.
It doesn’t. Here’s the video:
Of course League readers already know this because I wrote about the Progressive Insurance Snapshot product in the context of the norming power of insurance and the internet in my post from last Spring entitled I Can’t Drive 55:
Progressive Insurance does not care how fast you drive (so long as you don’t get caught!)
Progressive insurance does care about a few other details of your driving habits; how hard you accelerate and brake, what time of day you drive, and how much you drive.
The reason I know this is because they want you to let them monitor your driving habits in exchange for (the possibility of) lower rates. The way this works is that you let them put their Snapshot device in your car.
In their video promoting Snapshot, Progressive Insurance affirmatively states that Snapshot does not monitor where you drive or how fast you drive. It does monitor acceleration, miles driven, and time of day when driving, and presumably there is some sort of actuarial correlation between these metrics and the likelihood of accidents.
Here’s the other thing.
Progressive says that data from Snapshot cannot make your rates go up, only down, and down by as much as 30%.
This suggests that because Progressive is unable to distinguish between high-milage, hard-breaking drivers caught in rush hour traffic and those of us who work from home, brake gently, and make a point of traveling at off-hours, we safer drivers have been subsidizing less safe drivers by paying rates that are not justified by our driving habits, and that Progressive believes if they can identify and capture more cautious drivers, they’ll be able to add to their revenue out of proportion to their increased exposure.
Now I suspect some of you have your arms akimbo after reading the above passage, and I’ll grant you that suspicions of an insurance company’s motives is warranted. But in this case I’m inclined to give Progressive the benefit of the doubt.
Why? Because recreational boat insurance is incredibly cheap. Let me explain:
Our sloop S/V INTEMPERANCE was a 1979 Catalina 38 that we bought in 2007 for $23,500. I thought that was under value, so when we got recreational insurance against loss and liability I asked for a stated-value policy of $30K, plus another $1K for personal effects. That put the insurance company’s exposure at $1,000,000 if someone got hurt or if I ran into someone’s boat, or if I had an oil spill, and another $31K if the boat was wrecked.
The annual cost for this coverage was $525, and if you compare that to a commensurate amount of loss and liability coverage for a private automobile, it’s a fantastic deal.
Why? Because unlike most private cars, which are in near daily use, most private boats are tremendously under-utilized. It’s taken as axiomatic that on a per use basis for what it costs most people to keep and operate a 35 foot private boat they could hire a luxury charter for each outing and still end up ahead. But the sheer (mere?) joy of ownership is something people are willing to pay for, and the relatively low risk of their boats sitting idle subsidizes the rate that I pay, even though I use my boat a lot.
Now here’s the interesting thing.
During my guest-posting stint for Megan McArdle I actually had “I Can’t Drive 55” cued up as a post for The Atlantic. I set it up at the close of Making a Living in the Wake of the Pelican Disaster, which was supposed to be a lead in to the 55 post:
Of course not all economic actors are as embedded in the markets and communities in which they conduct commerce. In my next post I’m going to talk about Progressive Auto Insurance’s Snapshot product, Montauk’s pirate sailing operations, and why I think Jay Rosen is wrong when he says that the internet weakens the authority of The Press. Thanks for reading!
Now first of all, yes. I’m settling a score.
I thought 55 was a really strong post. It was the culmination of an ongoing correspondence with James Fallows and James Poulos about social norms and driving habits that had been going on for nearly 2 years, it took me about 20 hours to write, I got really good feedback on it from my co-guest bloggers who “cheated” and read it in edit mode, and I was pretty disappointed when it didn’t run. So I’ll say now, with as glad a heart as I can muster, “Welcome to the party, Atlantic. The Snapshot device is an interesting development in the insurance business, and a good starting point for a provocative discussion. Glad you could join us.”
Secondly, a corrective. I’ve already said it once, and I will say it again now: the Snapshot device does not monitor speed.
Thirdly, the fact that Snapshot does not monitor speed is the most provocative aspect of the story, or it is if you start to explore the reasons why it doesn’t.
“So you’re happily tweeting away as your Google self-driving car crosses a bridge, its speed precisely synced to the 50 m.p.h. limit. A group of frisky schoolchildren is also heading across the bridge, on the pedestrian walkway. Suddenly, there’s a tussle, and three of the kids are pushed into the road, right in your vehicle’s path. Your self-driving car has a fraction of a second to make a choice: Either it swerves off the bridge, possibly killing you, or it runs over the children. What does the Google algorithm tell it to do?… We don’t even really know what a conscience is, but somebody’s going to have to program one nonetheless.”
This bit popped up on Twitter and elsewhere, and I will say, again with as glad a heart as I can muster that: 1) It depresses me that so many people who are generally thought of as Important Thinkers don’t seem to realize that we’re well past the point of living in a world where we already have Algorithmic Ethics and Mechanical Morality, and these mechanisms make decisions that can profoundly affect people’s lives; and 2) That these same sort of Important Thinkers use a retreaded Ethics 101 puzzle, a puzzle that describes the problem with roughly the same acuity of Zeno describing the flight arrow, to ask “provocative” questions about issues that have already been decided.
“You can’t throw bull with the ocean, she won’t listen.” I won’t give you the citation, because if you’ve read this far you must be one of my dedicated readers, so I don’t have to. You’ve read it before, you know who said it, and you know you’ll read it again.
On the other hand, you can carry a tide table. And you should.