The flip side of that is that people who don't provide that information are going to be grouped into a pool of relatively high risk people and be forced to pay higher bills. And the incentives line up such that, if you're better than the average non-sharer of personal information, you'll be significantly better off switching to being a sharer, which in turn increases the risk profile of the remaining non-sharers. And the cycle repeats until no one can afford not to share all their information.
And the same cycle will push insurance companies further and further into your personal life. Oh, you play video games a couple hours a week? That's $15 extra/month. Oh, you prefer watching football to watching the Wire? We'll ring you up for $5 extra/month. You're gay, that's $10/month. You married a person with an above average BMI? Well, that puts you into a higher risk profile, you'll see the charge on your next bill. Look, Aetna's new monthly offer: a purely voluntary opportunity for you to lower your insurance bill by up to 30%, just by installing a chip into the base of your skull and video cameras throughout your home, all paid for by the Company!
And the insurance companies that don't do this will face higher costs and lower profitability, eventually pushing them out of the market.
I have serious reservations about our changing cultural attitudes towards privacy too. But let's be honest here--this would make insurance cheaper for a lot of people, and more expensive for the subset of people who are currently getting subsidized by their peers. I mean, say that playing a couple hours of video games per week really does increase mortality significantly--why should people who don't play video games be forced to subsidize your habits (this is unlikely, anyway--I don't think one's choices of which leisure products to consume are significantly correlated with either positive or negative health outcomes)?
So why not use examples like these? "Oh, you bike to work? Great--your bill is going down! Oh, you have a good credit score? Okay, your premiums just went down again. Oh, you eat salad once in a while? Great, it doesn't take much to eat more healthily than the average American, so--you guessed it--your bill just went down again!"
Less information asymmetry between customers and insurance companies would lead to better prices for safer people, and fairer prices for riskier people (by "fairer" I mean "closer to their average lifetime insurance payout).
Whether it's worth it in terms of the loss of privacy is another question, but we shouldn't stack the deck by pretending everyone's premiums will go up unfairly.
Is this what happens today with car insurance? I don't think that's the case. Insurance companies offer "good driver discounts" all the time. What's the difference?
Yes, in theory it's just an extension of existing principles, and it will be a fast but gradual process grounded in practices that existed throughout the 20th century or even longer.
Technology changes things, though. A bullet might be considered just a better arrow, and a car a more efficient horse. But that doesn't mean they didn't radically uproot tradition and shared moral convention.
And the same cycle will push insurance companies further and further into your personal life. Oh, you play video games a couple hours a week? That's $15 extra/month. Oh, you prefer watching football to watching the Wire? We'll ring you up for $5 extra/month. You're gay, that's $10/month. You married a person with an above average BMI? Well, that puts you into a higher risk profile, you'll see the charge on your next bill. Look, Aetna's new monthly offer: a purely voluntary opportunity for you to lower your insurance bill by up to 30%, just by installing a chip into the base of your skull and video cameras throughout your home, all paid for by the Company!
And the insurance companies that don't do this will face higher costs and lower profitability, eventually pushing them out of the market.