No? Probably rightly so. The chances you run into Suarez and get bitten on top of that, are virtually non-existent. This is probably what Giorgio Chiellini was thinking when he started the match against Uruguay. But he should have taken that insurance. It would have provided him with a big bonus.

This article does not aim at finding the reason why Suarez did what he did. As a matter of fact, it was the third time. But let us take a close look at it, because this incident provides us with a good onset. In November 2010, the soccer legend bit PSV Eindhoven’s Bakkal, in April 2013 Branislav Ivanovic had the doubtful honour. The “bookkeeper” among you instantly understands the potential of a “Suarez biting bet” as the odds for a next bite to occur would appear to raise. When this trend prevails, it will take 7 months for the next bite to take place. In fact, this man is known for many more um, situational hazards. The fact that Suarez is the sitting target, and nearly every food brand reacted to it on Twitter, or even in the papers, was to be expected.

Let us go back to chance, … probability calculations have been performed for centuries. Girolama Cardano, an Italian physician from the 16th century, like so many of his contemporaries played dice. In this mindset, he developed the basis for probability calculation, and even today this is an important area in mathematics. His theories provided the basis of years and centuries of sophistication of what is still being used worldwide today.

For instance when mapping risk statistics.

Risk analysts do not do anything else than perform calculations all day and label them. Driving a car? Chances are that will have some sort of altercation in today’s heavy traffic. Young driver? That is just your bad luck. You are driving a fast, expensive car? Ouch, this will cost you. And why really? God knows, maybe you are only driving once a month. Or you have past your driver’s license exam with flying colours. But, statistics do not lie.

“Men lie, women lie, numbers don’t.”
- Jay Z in ‘Reminder’

Working with statistical averages is a technique that allows to spread uncertainty. It is nothing more or less than the realization of the smart reflex of not putting all your eggs into one basket. And there most certainly is a social side to all of this, we all get the feeling that we are paying the correct amount, not (much) too much, but at the same time we carry each other’s burden. Knowing that people generally do not die on us just like that, insurances are a lucrative pillar of society. Today, the calculation is simple. If the insurance company estimates the chance of an event, e.g. a 1% chance of death, then you will pay €1 for an insurance policy that will not pay more than €100.

But is that a smart thing to do in this day and age?

“There are three types of lies — lies, damn lies, and statistics.”
- Mark Twain, author of among others, ‘The Adventures of Tom Sawyer’
and ‘Adventures of Huckleberry Finn’

By definition, statistics are wrong. Because they have an aggregated side to them. On average they seem to be right, but once you dig deeper, the results tend to differ for each part.

Years, even centuries and decades ago, it was impossible to offer tailored insurances. Because it was not possible to establish the real risk. But it was a sufficiently efficient approach, because the insured person was not able to establish with sufficient certainty the real risk. And this is the second crucial element in the existence of insurances: there has to be a certain sense of risk, otherwise there is no market. If there is no need, there is no solution. Startups, insurance companies, potato, potato. At least, in this case.

Health insurance has changed. Or so it should.

Today, the situation has somewhat changed. The quantified self, a movement in which the user maps all his activities with the help of your devices and add-ons is a fast growing trend. Companies producing accessories such as Jawbone, Nike’s Fuelband, Fitbit or the Sony, Samsung and other wearables appear in the city streets more and more often. But the big change is to be found with the device we come into contact with on a daily basis. According to recent research by Forrrester, even 200 to 300 times a day.

Recently, Google announced Google Fit during the Google I/O event. A Health Data platform, like they call it themselves that collects as many of your health data as possible and subsequently provides them through an API to app developers. The data will be provided through a number of sources: through a number of wearables, such as the Nike Fuelband (Nike has made a deal with Apple) a device that was being announced by Adidas, and a lot of devices in the future. But it will be fed by the sensors in your own Android device — the Nexus 6 would, just like the Iphone 5S get a biometric sensor. Taking into account that you use this 200 to 300 times a day to unlock your device, Google knows like no other how you are really feeling.

But Google is not the first to attempt this. Before this, Samsung had announced its SAMI platform and also Apple has introduced iOS 8 at the April edition of the WWDC, paying extra attention to Health Kit, Apple’s Health API. Apple’s promise is similar. ‘In charge of your own data, centrally and securely stored, and sharable with other devices according to your wishes’. And the battle is not fought yet. The number of Apple’s patents in the biometrics area is growing steadily.

From now on, your 200 interactions per day even predict what will happen to you. This is something that our colleagues from Argus Labs, notably a Belgian startup were able to wholeheartedly contribute to. A test-project dedicated to epileptic seizures converts input data by means of your Smartphone into predictive behaviour when a seizure becomes reality. Another example? Recently, one of my friends went to the doctor. After a heavy physical effort, his heart sometimes misses sometimes a beat. A weird indescribable feeling. And it does not happen all the time. The doctor refers you to a specialist. But at not one of these moments does your heart miss a beat. “All clear” says the verdict. On the way home, it does miss a beat. Tough luck. Today, this no longer has to happen.

Also when it comes to driving behaviour, technology is not at a standstill.

Nowadays, your Smartphone measures with the built in gyroscope, GPS and accelerometer how you are driving, breaking and accelerating. AXA in Belgium and Statefarm in the US are running experiments to adjust your policy to match your driving behaviour. Linked with educational tips, because a man that has been warned is worth two. But the new renewal takes place worldwide — also in Belgium. Kickstarter projects are being launched that link your car data to your smart phone. OBD II data are being read and live streamed onto the web. Where you drive, whether you abide by the rules, whether you keep sufficient distance, whether you brake smoothly, and others, all this is being measured live. More accurately than your device. More relevant to the insurance company.

A third important task for the insurance companies is home policies.

You pay your premium and hope you never will have to use it. But, what is the real chance to have problems? What is your real risk? The number of rooms, the number of windows, the score on your EPC (short for energy performance certificate) and many more form the basis of your premium today. Also in this field startups are popping up like daisies. With True North, we are working for a client (not an insurer by the way) with similar predictive data. Real data like flood danger, busy traffic, crime, density and more. Also in this case, a precisely tailored estimate has become a real possibility.

Let us take a look at how insurance companies work in this day and age: a sense of risk has to exist and it must be possible to make a statistical estimate. Nowadays a life insurance policy takes declared behaviour into account: “No, I do not smoke. Of course I eat healthily. Vegetables, everyday doctor. And I am a keen sportsman.” A small error rate, and your premium is calculated in no time. Tomorrow, your Smartphone tells your insurance broker live whether you smoke. And if you eat healthily. And do sports. Maybe too intensely. Your risk becomes perfectly estimable. Tailored. For yourself and your insurer. Which will allow a tailored insurance. A flat fee covers everything you need. Never pay too much. Everything is covered. Convenience through technology. Thank you Google, Apple and the like.

Should we be concerned about every thinkable risk such as — God Forbid — get bitten by Luis Suarez? Probably not. But it is a nice example of how probability calculation nowadays is able to push up a premium for a virtually minimal risk. While there are so many possibilities nowadays to calculate the risk for “S-Bite marks”. Or any other risk for that matter. Your risk.

Whether insurers are ready for this revolution is not clear. Changes are coming for sure. Technological progress makes us more assertive, and the moment people can use this to their advantage, they will not hesitate to put insurers under pressure.

Exciting times for insurers.