Big Data and the Insurance Industry: Who Is Responsible?

Colloquium lecture by Lisa Herzog, organized by the Centre for Philosophy, Politics and Economics

The arrival of “Big Data” has been described as “game changers” for the insurance industry. In this paper, I discuss these developments from the perspective of justice, applying the framework of luck egalitarianism. Luck egalitarianism has often been criticized as a general theory of justice, but it seems well-suited for grasping our moral intuitions about the design of specific institutions, and insurance markets seem a good case in point. With new data sources, the line between “choice” and “circumstances” could be drawn with much more precision – or so it seems. But if one looks into these possibilities in more detail, it turns out that not only are there many practical challenges, the theoretical challenges of what this line actually consists in also creates problems. Rather than finding a notion of responsible behavior in data, it is often a matter of constructing such a notion, and of thereby taking into account the – often unjust – contexts in which individuals act. There is great need for political regulation in this area, and at the same time, the new technical possibilities of data analysis can help sharpen our intuitions about the theoretical issues at stake.