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Allstate used GasBuddy and other apps to track driving behavior: lawsuit

arstechnica.com

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Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#141

Post by lotsofpulp »

BalinKing wrote: post #131
lotsofpulp wrote: post #106

Earlier quoted context omitted.

Why wouldn’t I think of children? Isn’t one of the most common ruminations of modern society that children cannot roam freely due to excess risk of being hurt or killed by a distracted driver? https://www.consumeraffairs.com/news/these-vehicles-may-pose... >IIHS says pedestrian crash deaths have risen 80% since hitting their low in 2009. The statistics show that 2021 was almost as deadly to people on foot as last yea…

> Airline pilots get recorded, why shouldn’t drivers? AFAIK, general aviation pilots are not recorded. Black boxes are only a thing in commercial aviation, so a more appropriate analogy would be the recording of bus or semi-truck drivers.

There is far less moral hazard as a general aviation pilot because death/grave injury is far more likely in an airplane collision, whereas a personal vehicle driver is relatively safe, especially in vehicles most dangerous to others

Regardless, what is and is not required of all pilots is beside the point. The point is society implements a safety/accountability measure to prevent x rate of injuries/deaths…but society does not implement the same safety/accountability measure to prevent y rate of injuries/deaths where y is far greater than x.

The discrepancy is because it is politically unpopular to hold the people causing the larger rate of injury accountable (voters who drive personal cars), whereas it is politically popular to hold the people causing a smaller rate of injury accountable (commercial pilots).

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#142

Post by drawkward »

stackedinserter wrote: post #140
drawkward wrote: post #104

All mandatory insurance is a subsidy to private shareholders; it should not exist as is. If insurance is legally required, it should also be legally required to be non-profit and government run.

It is government run in some Canadian provinces, and still sucks.

i never made any claim about its quality, just about who should be profiting off of legal mandates.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#143

Post by yuliyp »

Scoundreller wrote: post #13
wbl wrote: post #9

Earlier quoted context omitted.

I like it when unsafe drivers pay the costs of the way they endanger all of us.

Once insurance companies can charge perfect premiums, there will be no point in buying insurance at all.

If you know the future exactly, then sure. If your knowledge of the future is just in expected values, then it can still make sense. Imagine the radio station doing a "we'll give you a million bucks if X happens" promotion, when X is truly random. The radio station doesn't have a million bucks to front that randomness, but the insurance company can do it.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#144

Post by WarOnPrivacy »

lief79 wrote: post #77
nemomarx wrote: post #57

Earlier quoted context omitted.

I guess you could argue that driving near deer at all is still more risk of accidents and damage to the car than a driver who never goes out of their suburb?

Deer are common in many suburbs.

> Deer are common in many suburbs.

My sister lives in a dense area of a major city and sees pest deer every day.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#145

Post by dghlsakjg »

s1artibartfast wrote: post #137
dghlsakjg wrote: post #70

Earlier quoted context omitted.

If you keep selling a product for $95 that costs you $100 to deliver you will be "in the hole" on that product line. For Allstate, that product line is insurance. If you invest that $95, get a $15 dollar return, and then deliver the $100 product, you have made a net profit even though you sold the product for below cost. You are still in the hole for the insurance product no matter how you slice it. Yes, I get that t…

is it really a float? Im not an accountant, but when I think of float, I think of the balance in an account that regularly clears. Is it analogous to interest in household checking account where income = bills, or is it analogous to the same household with a large retirement account that sweeps the checking and pays bills. Maybe another way of asking this is whats the relative size of the interest bearing investments…

The float in the insurance industry is simply the term of art for the pool of money from premiums paid that is available for investment. On that particular statement, I would look at page 8. The assets are, more or less, the float which comes pretty directly from the liabilities of unearned premiums and estimated future claim payments in the liabilities.

It is hardly a coincidence that their unearned premiums + claim payment reserve happens to be roughly the amount they have invested ($65b and $66b respectively).

Warren Buffets letters to investors explain the insurance industry, and the float, as a whole pretty well (page 7): https://www.berkshirehathaway.com/letters/2013ltr.pdf

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#146

Post by 0xfeba »

aziaziazi wrote: post #90
nyrikki wrote: post #30

Earlier quoted context omitted.

No, the inference they have isn't reliable enough to predict anything except with broad groups. Swerving to avoid road debris or hard braking to avoid a deer as examples of what have cost commercial drivers jobs. Look at the CDL world for a view into this. I have 30 years of clean driving records BTW, so not trying to justify risky driving BTW

If you drive slower you’ll break smoother. I hate insurances and their hidden shenanigany-like algorithms but at the end it is a fair game I when you look at the big picture. I never owned a car but I feel deeply concerned as I use the road by foot, bike and rentals and am often scared by the drivers usage of the road. You know : texting, updating gps, driving full speed in turns without visibility, taking over as Sc…

> The speed limit is a LIMIT not a requirement.

But after traffic analysis by engineers, the final number is set by politicians.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#147

Post by ses1984 »

airstrike wrote: post #27
esafak wrote: post #22

Earlier quoted context omitted.

On average you will pay more, but not all at once, which may be prohibitively expensive. There will still be value in insurance.

That's the same as putting it in a piggy bank, isn't it? Or even better in a fixed income account.

What if you have perfect information and conclude that your chance of being in a terrible accident, requiring tens of millions of dollars of medical care and property repair, is 1% for every billion miles of driving, and you’re the unlucky person who happened to be behind the wheel. Will you have enough money in your piggy bank to cover it?

Maybe you could argue you shouldn’t have to cover medical expenses if we had a single payer system—the money to mitigate medical risk from driving still has to come from somewhere.

Maybe you could argue that damage to property should come from those property owners’ insurance.

What if you don’t get into a terrible accident, you just get into a boring accident where you total your car and don’t hurt anyone. You know the odds of this are low, chances are it won’t happen in your life, but it will probably happen to someone you know. What if it happens to you, when you’re very young and have a new car? You haven’t had a chance to put away any money in your piggy bank yet. You need to replace your car now. How does a piggy bank help you?

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#148

Post by ses1984 »

StackRanker3000 wrote: post #63
cossatot wrote: post #43

Earlier quoted context omitted.

No, because the amount of money you have in a bank account accumulates linearly, so you can only pay up to what you have put in. With insurance, you can get a payout more than what you have contributed up to that point, which is necessary for covering catastrophic damages.

But in this hypothetical the insurance company has perfect information, so they won’t sell you that policy that has to be paid out for more than you’ve contributed. It’s just a thought experiment, but the more information they have on us, the more relevant it becomes.

They can’t predict the future, they can’t predict exactly when you’ll get in an accident.

Perfect information means they know your risk level to the best possible accuracy, which would really only apply to populations.

Perfect information means they insure 1000 people and predict they’ll have one bad accident per year. After ten years they covered for ten accidents. All ten could have occurred in the first year and they would still be correct.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#149

Post by ceejayoz »

dghlsakjg wrote: post #70
ceejayoz wrote: post #56

Earlier quoted context omitted.

But... they don't have money to invest without the insurance premiums coming in. My family finances look a lot worse if you exclude interest and investment proceeds at random from the analysis, too. $10-20B profit annually is not something I'd describe as "in the hole". The "hole" is overflowing with money.

If you keep selling a product for $95 that costs you $100 to deliver you will be "in the hole" on that product line. For Allstate, that product line is insurance. If you invest that $95, get a $15 dollar return, and then deliver the $100 product, you have made a net profit even though you sold the product for below cost. You are still in the hole for the insurance product no matter how you slice it. Yes, I get that t…

> My point is that isn't true.

But it is still true, unless I'm forbidden from making my own investments.

Re: Allstate used GasBuddy and other apps to track driving behavior: lawsuit

#150

Post by s1artibartfast »

dghlsakjg wrote: post #145
s1artibartfast wrote: post #137

Earlier quoted context omitted.

is it really a float? Im not an accountant, but when I think of float, I think of the balance in an account that regularly clears. Is it analogous to interest in household checking account where income = bills, or is it analogous to the same household with a large retirement account that sweeps the checking and pays bills. Maybe another way of asking this is whats the relative size of the interest bearing investments…

The float in the insurance industry is simply the term of art for the pool of money from premiums paid that is available for investment. On that particular statement, I would look at page 8. The assets are, more or less, the float which comes pretty directly from the liabilities of unearned premiums and estimated future claim payments in the liabilities. It is hardly a coincidence that their unearned premiums + claim…

Okay, so if I'm reading this correctly, annual premium income is around $30 billion, annual insurance payouts is also around $30 billion ( cost of administration). Investment assets under management around 66 billion.

This is all right, I still don't see how the insurance business unit add value unless there are profitable years on average.

I'll have to check out the letters, maybe they will explain this.

Edit: Having read that section of the letter, my understanding is the existence of insurance companies relies on the belief that in the long run, the insurance side will not be a loss leader, at least for insurance types without a significant time lag between customer acquisition and insurance payout. For example, operating a "loss leader" could be profitable for something like life insurance where there average claim for a new customer is in the future.

It seems like insurance types where there is no intrinsic time delay between customer acquisition and payout (e.g. auto, home) can not operate this way. That is to say, you cant build up a profitable interest bearing float if average policy payouts are >100% in month 1 of the policy.

Would you agree with this description?

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