How Telematics Can Make Insurance Fairer For Everyone
The proliferation of internet of things technology in our everyday lives, including capabilities such as telematics and AI, has been extremely beneficial to many sectors, including insurance. The algorithms this technology can create provide a variety of benefits such as saving time when looking for an insurance quote and helping drivers to save money by searching for the best deals across the market.
However, although algorithms and technology are becoming more responsible for the decisions that we, and organisations, make on a day-to-day basis, the issue of bias still remains and as we continue to develop, build and adopt technology at a rapid pace, how do we ensure that inherent bias is not reinforced?
In a recent article in the Internet of Business, AI technologist Kristi Sharma spoke about her ambition to bring greater diversity and accountability to the algorithms which guide our decisions and sift through our data.
Ensuring data and algorithms remain fair and free of bias is something which we continue to work on here at The Floow. This includes advanced work to ensure a fair understanding of risk regardless of the device used to gather the mobility data, as well as fairly taking into consideration the geography in which behaviour is being observed. We believe it is vital to ensure that the work we do not only helps to make mobility safer and smarter for all but that it also makes it fairer for everyone.
One place this specifically affects is insurance and the way that policies are priced and drivers are viewed based on an insurer’s understanding of the risk which they represent on the roads.
The addition of telematics into an insurance proposition can help to make the insurance process fairer for all drivers, especially young drivers who are regularly penalised with high insurance costs due to their age and inexperience on the road. It provides insurers with insights into the actual driving behaviour of their policyholders, giving them a more rounded view of the risk each specific driver represents.
This allows insurers to more accurately predict risk profiles and price policies by using behavioural insights driven from telematics data rather than relying solely on demographic and location factors such as age, postcode and occupation which can be seen as unfair. This information also provides drivers with visibility of their behaviour on the road giving them the opportunity to make positive improvements to their driving behaviour.
The behavioural and journey data The Floow collects informs the development of our scoring algorithms therefore it is important that the way we handle this data ensures fairness, consistency and unbiased results to inform fair views of a driver’s risk profile. We achieve this through anonymisation of behavioural and journey data before scoring, meeting good data practices and ensuring that no bias informs the way our algorithm scores a driver’s journey.
Bias and fairness in telematics and the insurance industry is something which we are looking at through our work on the UPLIFT project. The aim of this project is to strengthen the UK’s position in the motor insurance sector building upon already leading telematics capabilities and seeking to empower improved and fairer insurance products to make mobility safer and smarter for all.
UPLIFT investigates how to enhance the insurance industry through more advanced telematics by working to ensure fairness and a lack of bias when telematics is used for insurance purposes by making sure strong ethical and data transparency is optimised throughout the process. The project has been designed to research new telematics enhancements to target strategic improvements in fairer risk estimation, fairer fraud estimation and enhanced driver feedback.
The goal with UPLIFT is to grow new fine-grained understanding of risk directly from telematics minimising the use of traditional insurance risk criteria which are less easy to justify and potentially unfair to policyholders. It also aims to enable fairer, personalised and easier to understand insurance products for drivers.
Our work on research projects such as UPLIFT allow us to work towards making insurance fairer for everyone by informing how we understand risk to make sure our approaches remain free of bias when analysing and scoring millions of miles of driving data collected from hundreds of thousands of journeys worldwide daily. This research helps to guarantee that telematics remains a fairer and more beneficial addition to the insurance market.
To find out more about the research projects we contribute to, including the UPLIFT project, check out this article from issue two of Driven.