The Fragile Community
WikiLeaks and a fragile community - David Brooks NYT Opinion
Consider the effect computers have had on the insurance industry, and consequentially, on all of the risks (health, life, fire, accident, loss) funded by the insurance industry. Prior to computers, the historical price for an insurance provider to cover a beneficiary was the product of static market conditions. Insurance is a financial service product based on knowledge of risk, and the knowledge of various risks to beneficiaries had been stable for many years. With the advent of computerization, beneficiaries and risk could be correlated in the machine so that insurers could now choose which beneficiaries were least likely to cost them benefits. Computer correlation of beneficiary data fundamentally shifted the bargaining power between insurers and beneficiaries, and as we can see with health insurance, the consequences to this radical shift are still playing out in a myriad of market and government reactions. (more…)
