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Artificial Intelligence: Using Google Street View to Set Insurance Premiums
Artificial Intelligence is good at identifying patterns. Researchers recently used historical insurance claim information aver a ten year period and matched it to the characteristics of the policy owner’s home scraped from Google Street View, like the type of house, its age and condition. This information let the researchers build a model that had a fairly accurate estimate of the likelihood of the policy owner would file a claim.
The model would give a much better predictor to insurance companies for charging auto insurance premiums.
The study concluded “that features visible on a picture of a house can be predictive of car accident risk, independently from classically used variables such as age or zip code. This finding is not only a step towards more granular risk prediction models, but also illustrates a novel approach to social science, where the real-world granular data is collected and analyzed at scale.”
The Google Street Map predictive method was found to be 2 percent better than the state-of-the-art risk methodology that was being used by insurance companies.
The research bring up questions of privacy. In Germany, for example, Google Street View is banned. If other industries like banks begin using this kind of data to improve their algorithms, it is likely that the discussion about privacy issues related to the capture, storage and use of data like Google Street View will become louder.
Google Street View is not banned in Germany. The government there requires Google to give citizens a chance to request blurring of images of their homes before posting the images in Google Maps. Google found this required too much labor, and after posting the initial images in 2010 or whenever it was, they swore to never update the images or complete imaging of the rest of the country, save a few sports stadiums and the like. And so far they haven’t updated them. A lot of the existing Street View images are probably really outdated.