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… maybe I just don’t understand … is there not a connection between insurance and risk? If it were not for “risk” would there be any need for insurance companies? Oh … wait … now I understand … the connection is not between insurance companies and risk it is between insurance companies and casinos. The “house/company” (casino/insurance) provides the context for “games” where suck… er … ah … (guests/clients) pay to willingly “play” (bet/pay premium) in the “games” all the time knowing that the “odds” of your winning are almost so infinitesimally small as for all practical purposes to be nonexistent.
Surely insurance companies would do no such thing …. oh wait, yes, they already do. (see the practice of “redlining”) Services such as insurance, banking, health care, and even the selection of locations for grocery markets have been found to use the redlining. I taught in a public school system, in a very low SES area of the district, long story short when trying to place a large order for pizzas to be delivered we were told that no deliveries could not be made to our location. Yep, you guessed it … the neighborhood had been “redlined” for pizza delivery due to its supposedly high crime rate. We were also told that the insurance company would not cover their delivery drivers in that area — day or night. (See Civil Rights Journal, Vol 3, N 1, 1998 – pp. 33-35)
In relation to Dana’s question shouldn’t we also ask and consider the possibility that not only as insurance companies have designate high risk areas and considering the refusal of coverage in those areas but also begin the process of designating “individual persons” as high risk areas?
There is already concern that insurance companies (and others) have been for some time considering the use of genetic data in the setting of insurance rates. Interesting discussion from 2016 (Switzerland) Is It Desirable that I Must Disclose My Genetic Data to Swiss Private Medical Insurances? written by Bräm C. · Szucs T. in Public Health Genomics 2016;19:251-259, https://doi.org/10.1159/000448276.
Also, there is this interesting paragraph from Genetics and the Insurance Industry written by Dr. Adela Osman, published in RGA and EMEA Quarterly – “The impact on product pricing due to information asymmetry that might stem from insurers’ ability (or lack thereof) to access genetic testing information is currently unknown. Research conducted in 2011 found that the effect of restricting the use of genetic test results in underwriting would be minimal – about a 1% to 3% increase in premiums (MacDonald, 2011). However, a recent report from the Canadian Institute of Actuaries, which examined 13 impairments with a known genetic marker, found that banning the use of genetic test results in underwriting could yield an increase in average mortality rates of 35% in males and 60% in females (Howard, 2014). The same author, in a 2016 report, demonstrated that a ban on using genetic information in critical illness underwriting would result in a 26% increase in the average CI claims rate (+16% for males and +41% for females) (Howard, 2016), and could necessitate an increase in premium rates. The insurance industry in the U.S. is currently expanding research to verify and corroborate these findings.”
Please notice in the Osman paragraph that the concern is that not having access to the genetic data for underwriting purposes might increase the “risk” to the insurer. Aaahhhhh statistics … We should do well to remember the words of A. J. Balfour, “Professor [Joseph] Munro reminded him of an old saying which he rather reluctantly proposed, in that company, to repeat. It was to the effect that there were three gradations of inveracity – there were lies, there were damned lies, and there were statistics.” This quote can be found in the Manchester Guardian, 29th June 1892.
On a statistical side note … I once attended a conference where there were quite a few papers in statistics being read. Walking down the hall in the conference center I saw an attendee wearing a t-shirt that read, “In God We Trust … Everyone else must produce multiple Exabytes of data.”
It may be that we are headed for a time where “risk assessment” will be openly done on an individual basis with the insurance companies only “insuring” only those who biologically and behaviorally pose the least possible risk to the company. When this is done the transformation will be complete … Insurance companies and Casinos will be indistinguishable from one another.