The Rise Of Real-Time, Context-Based Insurance

A small insurance startup, Root, has launched a car insurance specifically designed for Tesla vehicle owners that reduces the price of the policy the longer the vehicle runs in autonomous mode, on the basis that this mode is much safer than driving manually. Thus, drivers who spend a lot of time on the highway or in conditions where they can activate the autonomous mode will pay less insurance.

The idea is based on the fact that a vehicle is increasingly a connected platform, a smartphone on wheels from which we can obtain a constant flow of information. To sign up for a Root policy, which typically offers much lower prices than its competitors, you must download an app that allows the company to access GPS, accelerometers and gyroscopes data on your  smartphone, making it possible for the company to evaluate your driving.

After about two to three weeks driving with the app, enough for the average driver to forget about the app and go back to his or her typical driving habits, the algorithm has created a user profile that includes how much time the vehicle is in use, frequent destinations, whether drivers change lane excessively, their driving speeds, to what extent they respect traffic rules, or if they use their smartphone while driving, among many other things. After that period, the company claims it stops monitoring. Drivers receive a report on their driving, with some 30% of applicants rejected, that allows the insurer to reduce its prices by accepting only drivers they consider to be low risk and thereby increasing the average quality of their customer pool, which in the end means fewer payouts.

Root is operating at a very small scale: so far, only in Ohio, where the likelihood of finding many Tesla owners is probably low. But the idea of a context-based insurance policy that adjusts its price depending on the circumstances or our driving is undoubtedly original, and could be applied to many other situations from an insurance perspective. The company has not yet contacted Tesla, but believes that even without using vehicle data, its machine learning algorithms can deduce at what times the car is driving in Autopilot. Root wants to reach an agreement with Tesla to use data generated by the vehicle itself, which would allow even greater precision. Although Tesla has not yet commented, it has previously shown an interest in informing insurers about the added safety of its Autopilot. Likewise, the company has been open to the possibility of sharing the data generated by its vehicles with government agencies or with other companies and nothing seems to indicate that it would oppose the owners of its vehicles if they freely decide to share their driving data in exchange for a cheaper insurance policy.

At the same time, Tesla appears to be moving forward with the idea of including accident insurance and maintenance as part of a bespoke package to its customers. The initiative began in the Asian market, where most of the vehicles sold by the company already include this optional package in their price. Tesla wants to let insurers know that its vehicles are much safer than those of other manufacturers, so they can offer more competitively priced policies. At the moment, the company is working on this product with players from the insurance industry, but has not ruled out providing its own policies and becoming its own insurer if it is not able to obtain the right prices for what it considers to be a very low level of risk.

The idea of insuring something based on data generated in real time from our hyper-connected world is not new: for a number of years now, insurance companies have offered lower prices if owners reduce risk through technology, such as installing locating devices on new vehicles.

However, as the internet of things becomes a reality, the possibilities increase notably, raising hard-to-answer questions along the way: should companies offer lower health insurance policy for people known to lead healthy lives due to information provided by their wearables or connected scales? How about homeowners with connected devices that can provide early warning of flooding or fire? Some home insurance policies, in fact, already offer discounts if the owner has an alarm installed in the home and even taking into account its features.


Donald Trump, Republican Party, Daylight Saving: Your Weekend Briefing

1. A reminder to start off: If you live in the U.S., Canada or Mexican cities along the U.S. border, make sure you’ve set your clocks and watches forward an hour. (Europe switches March 26.)

As the change may affect your sleep routine in the coming nights, this quiz assessing what kind of sleeper you are can help you adjust. Or you can try these tips.

2. The time change signals spring’s imminent arrival, but springlike weather has arrived more than three weeks earlier than usual in some parts of the U.S. Research shows a strong link to climate change.

The new chief of the Environmental Protection Agency, Scott Pruitt, said carbon dioxide was not a primary contributor to global warming, contradicting the consensus scientific view on climate change.

Continue reading the main story
We also looked at President Trump’s conflicting views on the subject.

3. Can Paul Ryan get to 218?

That’s how many votes the House speaker will need to send the Republicans’ replacement plan for the Affordable Care Act to the Senate. Some rebellious members of the party say it will be “dead on arrival.”

Here’s our look at the causes of the revolt, our assessment that the bill would hurt supporters of Mr. Trump the most and a nonpartisan panel’s conclusion that it would give tax cuts to the wealthiest Americans.

The nonpartisan Congressional Budget Office’s official judgment on the plan’s cost and impact is expected Monday, and it could make or break the bill.

4. The Trump administration unexpectedly ordered 46 holdover U.S. attorneys to quit. One, the powerful Manhattan prosecutor Preet Bharara, above, was fired after refusing to do so.

Mr. Trump’s allies outside the government had been calling for the dismissal of appointees from President Barack Obama’s administration.

Separately, Michael Flynn, Mr. Trump’s ousted national security adviser, acknowledged that he worked as a foreign agent last year representing the interests of the Turkish government in a dispute with the U.S.

5. Celebrities are thought to be covered in figurative stardust, but it turns out there is a sprinkling of the real stuff around all of us.

An international team concluded that space dust is found on buildings, parking lots, sidewalks and park benches.

The team’s leader? A noted Norwegian jazz musician who became so fascinated by these micrometeorites that he refocused his life.

6. In other science news, some of the alarm over the mosquito-borne Zika virus is receding, more than a year after it was declared a global health emergency.

But for families of Zika babies, like several we followed in Brazil’s impoverished northeast, the disastrous effects are only deepening. If you want to help those coping with Zika, here’s how.

7. The ouster of South Korea’s president, being celebrated above in Seoul, is reshaping the geopolitical map of East Asia.

Stability and North Korea’s recent missile tests will be high on the agenda as Secretary of State Rex Tillerson visits the region this week, with stops in Beijing, Seoul and Tokyo.

But some global allies fear that the Trump presidency’s harsh language toward minorities, the news media, migrants and the European Union, as well as his praise for authoritarian leaders, is eroding Washington’s moral authority. Hawaii is suing to block Mr. Trump’s revised travel ban.

8. The F.B.I. is hunting for the source who gave WikiLeaks a huge cache of documents revealing tools and techniques the C.I.A. uses to break into smartphones, computers and even smart TVs. The likeliest culprit is a disaffected insider.

We have a handy guide for how to protect your devices from being breached.

One scholar says the documents actually show that the C.I.A. finds encrypted communications apps very difficult to break into. Above, the agency’s headquarters in Langley, Va.

9. The longest streak of private-sector job growth in U.S. history has continued into the first full month of Mr. Trump’s term.

The Labor Department said the economy added 235,000 jobs in February. U.S. stock indexes reacted positively, but declined over all for the week.

Apprenticeship programs to train American workers will be a topic when Chancellor Angela Merkel of Germany and Mr. Trump meet on Tuesday. We investigated how many profitable Fortune 500 companies pay no taxes. Some even got rebates.

10. Among our favorite features this week: The Times Magazine’s music issue, exploring which songs best capture our moment. You can listen to the tracks and enjoy a bonus podcast.

And have you ever seen a pink lake or what looks like a piece of cosmic ravioli?

11. The Jewish holiday of Purim began Saturday night, and Hindus are celebrating their spring festival of colors, Holi.

The unofficial three-week sports holiday — a.k.a. March Madness — begins today, with the selection of men’s and women’s college basketball teams in the N.C.A.A. tournament.

Meanwhile, Russia’s centennial of its revolution will not be honored.

12. The good news: Chance the Rapper contributed $1 million to Chicago’s public school system; the cast of “Hamilton” donated their salaries from an evening performance to support low-income women; and an 86-year-old man who has collected paper and aluminum products for decades gave $400,000 to a children’s home in Georgia.

Also smile-inspiring: the two children who interrupted their father during a TV interview, and the 5-year-old girl headed for the Scripps National Spelling Bee.

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