Its obvious why this is happening; some form of statistical modeling or AI correlated having a hotmail account with being higher risk.<p>This is a serious problem with all AI that makes decisions like this. Having a Hotmail account is a symptom of a problem which could lead to higher risk, but it is judging that symptom as if it is a cause which leads to risk.<p>Its exactly similar to the supposition that black people statistically commit more crime, and thus should pre-emptively receive harsher bail or be profiled. Unless you can scientifically prove that ethnicity causes crime to happen, its disgusting. This is obvious to us.<p>In year's past, correlation fallacies might have meant that black people were profiled by police more. Today, it means that we build AIs which make life-ending decisions like determining repeat offender risk, visa status, employment decisions, all of which predetermines an unknown outcome by correlating your known qualities with the known outcome of people with similar qualities to you.<p>We need regulation in place to stop any punitive decision making, public and private, which can be found in court to be based on correlation instead of causation.
I think the troubling aspect here is that these are actually statistically sound decisions. The company does not need to have a strong implication that Hotmail -> bad driver. They only need to know that P(bad driver | Hotmail) > P(bad driver | Gmail). And through some correlation (many of the theories proposed by others seem plausible), this apparently holds.<p>As developers of these systems, we need to be careful of how we might apply superficial correlations like these, so that we don't cause harm and burden to those who happen to be caught up in them through no fault of their own.<p>As a side note, I happen to have a 10+ year old Hotmail account that I use for signing up to services. My Gmail address is only given out to real people. Personally, I view it as a testament to my diligence that I have managed to give my email out to hundreds of websites, several of which have had database breaches, and still only see one or two unwanted emails per week.
My wife runs a online consumer facing business and her experience is hotmail account users are significantly more of a pain than any other email account type. They seem to be less able to understand instructions - it is a bit of a running joke in our house whenever she complains to me about some painful customer I ask her if they are a hotmail customer.
What would you rather have? Insurers using broad classes and heuristics about you to put you in a bucket that may not always be fair, or a company like Google who knows about your life to an extreme amount of detail calculating exactly how much risk you pose and providing that to the insurers as a service?<p>If you don't want to be put by insurers into buckets, well, all I can say is, be careful what you wish for.
Considering drivers are legally required to have insurance, the insurers should at minimum be legally required to provide a readable itemized explanation for their cost decision. I.e. this accident was factored in this much, your email domain was factored in this much, your race was factored in this much, etc. In other words, they should be required to explain the full details of whatever model they are using.<p>Also potentially the actual variables allowed in this computation should be white-listed by regulators. I.e. you can't use email domains because they were never allowed in the first place.<p>All of this could be considered "anti-innovation" or whatever, but I see it as the minimal consumer protection that should be provided for a service that drivers may *not skip.
I have no clue about what it takes to run a profitable insurance business, so no opinion on the soundness of that practice.<p>But I certainly <i>do</i> use metadata about people's communication in my general assessment of their relevance, trustfulness, clue level, etc. Do you use a Hotmail address? Well then, you really <i>are</i> out of it. Gmail? A lot sleaker, yes, but our conversation will be under third party scrutiny, and chances are that you haven't thought that part of it through. Your work mail for a private correspondance? I wouldn't do that in a million years, so yeah, your total score just went down a notch. Is that an Outlook client I see you're using? Fine, but sort of humdrum, and you are probably the kind of person who will send me .docx documents to read, and make a fuss when you get them back, formatting screwed up. And so on and so forth, most of it subconscious, but the evaluations stick, and mostly turn out to be accurate.<p>And yes, I have made first sortings of job applicants on the the same kind of criteria.
Someone with a HotMail account has managed to keep a consistent address for about twenty years. That is a <i>good</i> thing. The idea that they should ditch HotMail for the functionally equivalent GMail just because GMail is popular is, of course, idiotic.<p>But this is an insurance company, so it is plausible that they crunched the numbers and found a real effect.
Here's a bonus messed up way of discriminating that auto insurance companies do.<p>The minimum liability coverage in many states is $10K. However, every major insurance company insists they always recommend $100K. The average liability claim in an auto accident is around $15K.<p>However, if you look at that and think, hey, I have liquid funds, $10K - $100K isn't that big a gap for me, and if $15K is the average then $10K seems like a pretty good economic level.<p>Guess what? The insurance companies have decided that having the minimum $10K worth of coverage means that you are exhibiting high risk behavior and you get to pay more if you ever want to increase that compared to those who already have it, say to $25K when you get married and your wife is more nervous about it.<p>Oh, you want to shop around do you? Well they also target other insurance companies who primarily market themselves as selling those $10K policies that the larger companies refuse to write. Your high-risk tag will hit if you are coming from one of those (like the General) regardless of your coverage.<p>I'll repeat that in case its unclear. I have to pay more for my legally required insurance because I didn't want to buy more than what I am legally required to buy. I am being punished because I didn't buy what they preferred to sell me from the companies they preferred me to buy it from.<p>But once I behave "correctly", by paying more for a policy from one of the correct insurance companies with the arbitrary minimum the insurance companies prefer, they will bless me by removing my high-risk tag after 6 months. Thanks.
rant: another weird symptom of the world rapidly turning into shit.<p>It seems like more knowledge only makes the world worse. For a consumer there is very very very little benefit of corporations knowing anything about you.<p>The entire concept of insurance is to lessen the financial impact of an unfortunate event by everyone contributing a smaller amount. Fighting against this principle is insurance companies that want to keep accepting money but really don't want to hand it out again. To do this they will disadvantage anyone who is more likely to need their money. Some things make sense, maybe smokers should pay more for health insurance but with more and more data mining they will be able to find trends where people that do X might be 0.001% more likely to claim and will therefore charge them more. If you happen to also do X you will pay more even if you yourself arn't more likely to claim. and when they chuck ML/AI into the mix to look for trends it will just get worse.
More worryingly, they also appear to be using first name to influence insurance prices. Which is problematic, since first name correlates with race. See: <a href="https://news.ycombinator.com/item?id=16212991" rel="nofollow">https://news.ycombinator.com/item?id=16212991</a>
I would not be surprised if there is a correlation between maintaining a hotmail or yahoo account and poor decision-making impacting one's driving record.
I received an email from Admiral yesterday, which seems related but not completely:<p>"""<p>You may have seen a story in the news which claims we use customers' names to price our insurance based on race. This is 100% not the case and we do not, and have never, used this information to provide a price to our customers. I'm sorry if this story has caused you any concerns.<p>To offer our prices we use a complex rating structure and rate on many different variables and data sources. The journalists have misunderstood our pricing structure and the insurance quotes in the story are not like for like.<p>This email is to offer you an explanation of the press story and to offer my apologies for any concern caused. There is no need for you to take any action.<p>"""<p>Not sure which story that's referring to; seems somewhat different to (and much worse than) this one.<p>On a slightly different note: that old "trick" of adding an experienced driver to one's insurance has always seemed a bit odd to me. And as a 36-year-old, I have to say I'd assumed I was already past the point of its applicability. But I had cause to add my mother to an Admiral policy this week, and was very surprised to discover that adding her would give me a refund.
Please correct me if I am wrong, but as far as I can tell there is no advantage to the insurers, with respect only to the returns on policies, in producing accurate assessments of individual risk levels, as compared with only accurately assessing the aggregate risk level - the expected return is the same either way (and I would imagine that the individualised assessment is much more challenging).<p>Assuming I am correct about that, then the advantage to them of providing individualised premiums is to appear competitive in the market place, by being able to confidently match their premiums to individual risk levels, and thus being able to advertise (the possibility of) lower premiums.<p>Again assuming all of that is true, then there really isn't any net benefit - in fact presumably we have to pay for this whole individualised risk assessment exercise, which will actually raise the total costs.<p>More speculatively, I imagine that their job is made somewhat easier by cognitive biases that cause people to think, on average, that they are better than average at (for example) driving.
Related: Capital One was giving different loans based on browser used[0].<p>[0] <a href="https://consumerist.com/2010/11/01/capital-one-made-me-different-loan-offers-depending-on-which-browser-i-used/" rel="nofollow">https://consumerist.com/2010/11/01/capital-one-made-me-diffe...</a>
I've actually modeled email domain as a feature in a regression model of customer spending habits. We were all surprised to find it is a very predictive signal!<p>Of course insurance companies want to use every signal available to them to price discriminate on rates. If you are a good driver, the insurance company wants you because you are unlikely to file claims. Likewise, you are happy to receive a discount for being a good driver. A simple signal of being a good driver is your driving record, but we all know this isn't very reliable by itself. So you end up with other signals being used. Literally any signal that is not protected (like race/gender) will get used in any insurance model. None of this is new. The color of your car is used surely, so why is it so shocking that your email domain is used as well?
I wonder if a computer noticed that a hotmail account was correlated with more payouts.<p><a href="https://jacobitemag.com/2017/08/29/a-i-bias-doesnt-mean-what-journalists-want-you-to-think-it-means/" rel="nofollow">https://jacobitemag.com/2017/08/29/a-i-bias-doesnt-mean-what...</a>