John Loser, VP of Data at Oscar, on Insurance in the Age of Big Data:
Insurance, at its core, is about sharing risk. From the mutual aid societies of the ancient world through the advent of the modern insurance contract in 14th century Italy, humans have always relied on one another to protect against the vagaries of chance. Yet as we develop more and more sophisticated ways to measure and predict risk at the individual level, these timeworn concepts begin to break down. In a world where each individual’s future needs can be predicted with a high degree of accuracy, what becomes of insurance? Do we ask low-risk individuals to subsidize the high-risk? Or do we price risk to the individual, and leave those who truly need it on the outside looking in? With examples drawn from the world of healthcare, we’ll look at the cutting edge in predicting risk, the ways in which policymakers have responded to these challenges, and the ethics of sharing risk in a data-rich world.