report-consumer-friendly-scoring
Dieses Dokument ist Teil der Anfrage „Gutachten des Sachverständigenrats für Verbraucherfragen“
68 Areas for action:the state of research
the data sets with additional information, for example
3. Repersonalisation of from social networks (see, for instance, De Montjoye,
Hidalgo, Verleysen and Blondel, 2013; Ji, Li, Srivatsa, He
anonymised data and Beyah, 2016; Srivatsa and Hicks, 2012). In Germany,
reporters from the regional broadcaster Norddeutscher
Anonymised data, in other words data that are not re- Rundfunk (NDR) succeeded in repersonalising a dataset
traceable to a particular consumer, are not covered by they had obtained from a data trader which contained
the Data Protection Act and may therefore be collected some ten billion IP addresses, retrieved from about
and used in Germany without restriction and be freely three million German Internet users (Norddeutscher
bought and sold by data traders. The specific connec- Rundfunk, 2016). Detailed browsing histories proved to
tion to a person – typically a name, date of birth and be assignable to specific persons. The data set, in fact,
address – is therefore removed from the data sets. An- was apparently obtained by unlawful means: according
other option is to pseudonymise the data, which means to NDR, a Web of Trust browser extension from WOT Ser-
that attributes such as the name or address are replaced vices had recorded the websites visited by users without
with a pseudonym or other identifier.64 obtaining the users’ consent and had then stored the
data on servers outside Germany.
It would be wrong, however, to underestimate the dan-
ger of ‘de-anonymisation’ or ‘repersonalisation’ of such It may therefore be argued that, in the age of big data,
anonymised or pseudonymised data. It normally takes every item of data is potentially personal because of the
only a few items of related data to make individuals countless possibilities of linkage with other personal data
identifiable again. Sweeney (2000), for example, showed (Boehme-Neßler, 2016). The collation and reconciliation
that zip code, gender and date of birth are sufficient to of several data sets containing personal information such
identify unmistakably 87% of the US population. Coun- as shopping records, browsing histories, search histories,
ty, gender and date of birth are already enough to iden- etc., from various sources make it possible to trace these
tify 18% of US citizens. back to specific consumers. Big data and powerful al-
gorithms allow this to be done without any great effort.
There is ample evidence of the ways in which an- In this way, data acquired from data traders can also be
onymised data sets can be repersonalised. Researchers used for consumer scoring, since those data are also com-
at the University of Texas, for instance, using algorithms piled on individual persons as a rule.
that they had developed themselves, managed to reper-
sonalise parts of an anonymised Netflix data set with film To sum up, it may be said that the accumulation and trad-
reviews posted by 500,000 users. By reconciling the data ing of data play a major role in the age of big data and that
with non-anonymised film reviews on the Internet Movie it is possible with the aid of algorithms to identify specific
Database website, the researchers succeeded in identi- consumers, even in large anonymised data sets. But what
fying individual users. It also proved possible to uncover does this mean in relation to consumer scoring?
their political preferences and other sensitive informa-
tion (Narayanan and Shmatikov, 2008). In 2009, the same
authors demonstrated how active users of both Twitter
and the image-hosting service Flickr could be reidenti-
fied from an anonymised Twitter data set with an error
rate of only 12% (Narayanan and Shmatikov, 2009). Oth-
er studies have shown that anonymised mobility data
obtained from GPS sensors in smartphones, computers
and vehicles can be repersonalised by supplementing
64 The question whether pseudonymised data are not personal is a controversial one. Recital 26 of the GDPR states that “Personal data which have undergone
pseudonymisation, which could be attributed to a natural person by the use of additional information, should be considered to be information on an identifiable
natural person.”
Areas for action:the state of research 69
The diversion of data to other purposes is encouraged
4. Aggregation of data into a by data trading. Credit scoring in particular is already
closely associated with the data-trading business – often
super score in an inscrutable labyrinth of corporate conglomerates
and subsidiary companies. Two components of the Ber-
As data trading grows in significance, so does the poten- telsmann media group, for instance, are the data-trading
tial for data from the most diverse areas of people’s lives firm AZ Direct GmbH and the credit reference agency
to be brought together in a single database and a single Arvato Infoscore. Creditreform Boniversum, as well as
company. Potentially, then, data from various suppos- performing its own function as a credit reference agen-
edly unconnected areas of activity could be matched cy, also administers, through its subsidiary Microm,65a
with particular consumers and then used as a basis for consumer database registering socio-demographic, so-
scoring them. Such a super score would mean that an in- cio-economic and psychographic attributes. So there is
dividual person’s behaviour in a particular context could undoubtedly scope for the use of more unconventional
have far-reaching implications for every area of that per- attributes, such as online behaviour, for credit scoring as
son’s life (see section B.II.4 above). well as for other forms of consumer scoring.
Evidence of data and scores being diverted to other pur- It should also be mentioned at this point that such
poses has surfaced in the United States, for example. scope also exists regardless of data traders, for example
Credit information, such as the FICO score, is used by in major insurance companies that offer various types
providers of motor and household insurance to calcu- of insurance. With the consent of policyholders, data
late their premiums (Consumer Reports, 2015; Dixon and sets can be combined in these cases and analysed to-
Gellmann, 2014). What interests these insurers is not how gether, including behavioural data. The insurer Gener-
likely a customer is to repay a loan but rather the degree ali Versicherung AG, for instance, currently offers smart
of probability that he will be prepared to pay higher insur- insurance and telematics-based options in four types
ance premiums or that he will make a claim, and the data of insurance: life insurance and occupational disability
are fed into these assessments (O’Neil, 2016). insurance (Generali Vitality), motor insurance (Generali
Mobility) and household contents insurance (Generali
In a survey conducted by the Society of Human Re- Domocity). The Vitality programme is to be introduced
source Management, almost half (47%) of the 430 re- in the near future in the realm of private health insur-
spondent employers stated that they had a credit check ance. Even though it must be stressed that Generali has
conducted before they hired a new employee (Society not given any indication at all of plans to combine the
for Human Resource Management, 2012). In this case data sets, interesting questions certainly do arise in the
too, the aim was not actually to find out about an ap- light of the danger posed by super scores (see also the
plicant’s creditworthiness but to infer attributes such as market study in Part C below): could driving data not
trustworthiness and reliability (O’Neil, 2016). be relevant in the calculation of health insurance pre-
miums? After all, accidents involving personal injury
may increase the cost of health care. And, conversely,
does not a driver’s high risk of heart attacks increase the
probability of an accident?
65 https://www.microm.de/; accessed on 18 June 2018.
70 Areas for action:the state of research
The scenario of a super score, in which a person’s be-
haviour in various areas of his or her life is analysed and
used to calculate a score, seems entirely plausible in
the depicted context of innovative business models, big
data, data trading and de-anonymisation. While devel-
opments like the social credit system in China are not
to be expected from the governmental side in Germany,
they do raise the question whether consumers need to
be better protected against similar developments in the
business world. If large volumes of data on consumer
behaviour are easily obtainable and analytical tools can
be profitably deployed, data trading and consumer scor-
ing will continue to proliferate. The fact that companies
have a great interest in such developments is illustrat-
ed, for example, by a remark made by Douglas Merrill,
founder of the credit reference agency Zest Finance; his
analysis of the current state of play can also be taken as
a warning: “We feel like all data is credit data, we just
don’t know how to use it yet” (Hardy, 2012).
Market survey: credit reference agencies, motor insurance telematics and health insurance policies 71
C
Market survey: credit
reference agencies, motor
insurance telematics and
health insurance policies
72 Market survey: credit reference agencies, motor insurance telematics and health insurance policies
I. Introduction and key issues
In order to analyse the current supply of consumer scor- The other aim was to give respondents the opportunity
ing services in the German market in the three areas to communicate their experiences, opinions and plans
under examination in this report, namely credit scoring, relating to scoring and behavioural tariffs. We were in-
telematics-based motor premiums and health scoring, terested, for instance, in learning what they saw as the
the SVRV conducted a market study in the spring of pros and cons of scoring and how they saw the future of
2018, surveying agencies and insurers in the relevant such systems in their respective sectors. With a view to
market segments. obtaining the frankest possible responses, we assured
the insurers and other business representatives that
The method of a standardised written questionnaire was their responses would be analysed anonymously.
chosen to obtain responses directly from insurers and oth-
er businesses and possibly learning more than research In the analysis of the findings, our intention was to study
into company websites, etc., would reveal. Another objec- consumer problems in conjunction with corporate scoring
tive was to supplement the examination of the consumers’ models, with due regard to the problem areas identified
perspective in Part D with a portrayal of the perspective in Part B above, in order to build an empirical basis for the
and interests of compilers and users of scores. recommendations for action that we make in this report.
One of the aims was to gauge the current prevalence of
scoring systems and behaviour-based business models
in the three areas under examination. The three key
questions were:
• W
hich products are available and which
are in the pipeline?
• W
hy are people scored? What objectives are
being pursued?
• What data are used?
• Which quality criteria do scoring systems meet?
• H
ow transparent are companies about their
scoring systems?
Market survey: credit reference agencies, motor insurance telematics and health insurance policies 73
II. Survey design
The market study conducted by the administrative of- Health insurers, unlike credit reference agencies and
fice of the SVRV encompassed firstly credit reference motor insurers, were not confronted with the specific
agencies, secondly motor insurers and thirdly both stat- term ‘scoring’, since the concept of ‘lifestyle-based tar-
utory and private health insurers. Market research was iffs’ seemed to be commoner in this sector and there-
conducted into these three sectors with a view to iden- fore more expedient. For this reason, most of the ques-
tifying relevant businesses for the survey, and a market tions relating to score calculation, modelling, statistical
profile was produced to serve as the basis for the survey. quality criteria, etc., were omitted from the health in-
surers’ questionnaire.
Although specific consumer problems could be expect-
ed to emerge in each of the individual market segments, On the whole, then, a comparative analysis of the sur-
provision also had to be made for an overarching discus- vey findings was possible, while specific conditions and
sion. For this reason, care was taken when conducting potential trends in a particular sector could also be ad-
the survey to maintain a sufficient degree of standardi- dressed. In the analysis, scoring-related consumer prob-
sation to ensure that most of the questions were identi- lems affecting all three market segments could be high-
cally or similarly worded for all respondents in the three lighted, and potential best practices could be elicited.
areas (see Annex II).
The questionnaire was not pretested but was developed
At the same time, specific features of the three segments on the basis of background discussions with representa-
also had to be taken into account. For example, the sur- tives of agencies and insurers and with scoring experts.
vey dealt with potential future trends and influencing
factors that varied from one segment to another. For A word of caution: the findings of this market study are
the credit reference agencies, for example, there was a based solely on responses from representatives of agen-
question about the possible use of data from social me- cies and insurers, and it was not always possible to vali-
dia, motor insurers were asked for their views on the Eu- date these, for example by consulting publicly available
ropean eCall Regulation, and health insurers were asked sources. The primary aim of the study was therefore to
about electronic patient files. establish the nature and extent of the information that
agencies and insurers make available about their scor-
The consideration of specific conditions in the survey ing systems and also to find out what views, ambitions
was most evident in the domain of health insurance, be- and wishes they would express with regard to scoring
cause neither statutory nor private insurers in Germany when assured of anonymity.
offer policies with lifestyle-based premiums at the pres-
ent time. Policyholders may, however, take part in bonus For this reason, most of the questions were open-ended,
programmes in which healthy activities and participa- that is to say there were only a few questions in which
tion in preventive measures are ‘scored’ in a sense,66i- respondents were able to select a preformulated reply.
nasmuch as they earn bonus points which policyholders For the analysis of the open-ended questions a quan-
can redeem for monetary or other rewards. In the cases titative content analysis was conducted, and a classifi-
of credit reference agencies and telematics-based motor cation system with summative categories and associat-
insurance tariffs, however, the degree of automation is ed codes was developed. All responses were coded by
considerably more advanced. The questionnaire for in- three estimators acting independently of each other.67
surers focused far more on establishing where ventures
into health scoring were already in evidence and what
the respondents’ wishes, plans and views were with re-
gard to health scoring.
66 Some bonus programmes even offer the option of using data from fitness apps to earn points as well as enabling participants to check their current points total and
administer their points account digitally.
67 Where responses were coded differently, the category on which two estimators agreed was selected.
74 Market survey: credit reference agencies, motor insurance telematics and health insurance policies
In the areas of credit scoring and telematics-based mo- Motor insurers
tor insurance tariffs, the response rates both exceeded Another questionnaire was sent to motor insurers that
50% (60% for the credit reference agencies and 63% for offer telematics-based tariffs. There are no providers of
the motor insurers), while the response rate for health motor insurance whose product portfolio consists en-
insurers came to 41%. The findings cannot be consid- tirely of telematics-based policies; on the contrary, tele-
ered representative of the respective sectors in their en- matics-based premiums are add-ons that are offered for
tirety, and the responses reported here provide limited existing motor insurance policies
scope for generalisations.
A total of 15 telematics-based tariffs or add-ons were
identified in the realm of motor insurance. Of the provid-
ers we contacted, five took part in the survey; some of
these companies also responded on behalf of subsidiar-
ies. As part of a pilot project implemented between 2013
1. Overview of providers and 2015, Sparkassen Direktversicherung had tested a
telematics-based tariff and also took part in the survey.
In total, responses relating to ten telematics-based tar-
Credit reference agencies iffs were received. These tariffs are listed in Annex I.2.
To analyse the German market in credit scores, we
surveyed various credit reference agencies. These are
private-sector companies which communicate to busi- Statutory and private health insurers
ness partners economically relevant data and credit This market study also involved a survey of all health
ratings pertaining to individuals. Questionnaires were insurers operating in Germany. Although health scoring
sent to five agencies, all of which are members of the as such is not practised here, the aim was to shed light
association of credit reference agencies known as Die on the various bonus programmes so as to establish in
Wirtschaftsauskunfteien e. V. (formerly called Verband what form and to what extent policyholders’ healthy
der Handelsauskunfteien e. V.) and provide credit infor- lifestyles are being registered and rewarded. In addition,
mation on private individuals. Annex I.1 contains a list insurers were questioned about their attitudes to life-
of the participating firms. style-based tariffs and on their plans for the near future
with regard to such schemes.
At the present time, a total of 110 providers of statutory
health insurance68 and 43 private69 health insurers are
operating in the German market, of which a total of 62
(47 statutory and 15 private) took part in the survey70
(see Annex I.3).
68 Information from the National Association of Statutory Health Insurance Funds at https://www.gkv-spitzenverband.de/; accessed on 10 July 2018.
69 Information from the Association of Private Health Insurance Companies at https://www.pkv.de/; accessed on 10 July 2018.
70 The participating Local Health Insurance Funds (AOKs) answered some of the questions identically, namely those relating to views on lifestyle-based tariffs and
future prospects. When the responses were analysed, however, each response from each of the AOKs was assessed once, which meant that the responses in question
were each assessed eleven times.
Market survey: credit reference agencies, motor insurance telematics and health insurance policies 75
Questions on supervision and quality assurance covered
2. The questionnaires measures taken to guarantee that the input data were
up to date as well as the existence of accurate and pro-
A separate questionnaire was compiled for each market cedural checks by supervisory authorities.
segment (see Annex II). The questionnaires were sent by
post and e-mail to the providers referred to above at the Following questions on customers’ information access
end of March 2018. Assurances were given that respons- rights and their right to have errors corrected, the insur-
es being analysed would not be directly identifiable with ers and credit reference agencies were asked for their
the name of the responding company. appraisal of the current state of their respective markets,
of scoring systems and of possible future developments.
In particular, questions were framed on the following They were asked which items of additional data com-
subjects: panies would like to collect and evaluate and whether
1. business models, they saw a need for adaptation of laws and regulations.
2. data collection and calculation of scores, They were also asked to discuss the advantages and
3. oversight and information rights, disadvantages of scoring. The question whether there
4. views on the subject of scoring and future are already specific plans to introduce behavioural tar-
prospects iffs and/or whether these have been judged beneficial
is particularly relevant to the realm of health insurance,
First of all, the insurers and credit reference agencies since health insurers do not yet offer such tariffs.
were asked a few questions about their business mod-
el. Among the items of information we were interested
in learning from the credit reference agencies were the
conditions on which credit scores are disclosed. As re-
gards the motor insurers’ telematics-based tariffs and
the health insurers’ bonus programmes, the questions
were designed to elicit information such as wheth-
er these schemes were focused on a particular target
group and what attributes characterised the customers
who took part in them. There were also questions on the
benefits for participants and the impact on their driving
or on the healthiness of their lifestyle.
There was also a set of questions on data collection and
the calculation of scores for the credit reference agen-
cies and the motor insurers. Which sources or technol-
ogy are used by companies to collect data (e. g. plug-in
telematics modems or smartphone apps) was of interest
to us, as was the question of who calculates the scores.
Then came questions about the input variables and
about the estimation models that are used and their
quality.
76 Market survey: credit reference agencies, motor insurance telematics and health insurance policies
III. Discussion of findings
and highlighted
consumer problems
A comprehensive description of all of the findings of the
market study is set out in Annex III. In addition, Annex
IV contains a tabular presentation of the findings. This
chapter discusses the key findings and the consumer “The objective reason for this product
problems they highlight as these relate to the areas for format is that young adults below the
action examined in Part B above. age of 25 have more frequent and se-
rious accidents than drivers in older
age brackets.”
1. Diffusion of scoring in the Must telematics-based motor insurance be seen as a
niche product, or will it become more widespread? Both
market segments under assessments feature in the companies’ responses. Some
examination providers take the view that the use of telematics will
radically transform business models in the industry and
While credit scoring by credit reference agencies is an that the trend towards behavioural tariffs is irreversible.
established line of business, the market study shows
that scoring has made far fewer inroads into motor
and health insurance than might be inferred from the
public debate.
“We believe that today’s customers
Of the 90 or so firms that currently market motor insur- expect more from their insurer than
ance policies in Germany,71 our research showed that claims settlement.”
only 16 offer telematics-based tariffs in which the cost
of premiums is determined by a score reflecting the poli-
cyholder’s driving habits. These include major insurance
groups with large numbers of policyholders, yet the sur- One argument that is often advanced against the use of
vey revealed that the percentage who have signed up telematics from a corporate viewpoint focuses on the
to a telematics-based tariff is still very low – less than high costs arising from telematics-based tariffs for insur-
one per cent for some companies. Six of the ten provid- ers. Especially in the case of business models involving
ers taking part in this survey target only young drivers built-in black boxes, the cost and effort of installing the
and learner drivers with their telematics-based tariffs, technology and hardware, combined with the discounts
because premiums traditionally tend to be high for this for good driving, seem to make such schemes unprofit-
group and a potential cost reduction is particularly ap- able, as responses to the survey suggest. This may also
pealing to them. be the reason that some insurers have opted against in-
stalled hardware altogether and record data exclusively
through a smartphone app. Some providers see a solu-
71 Information from the German Insurance Association (GDV) at https://www.gdv.de/de/zahlen-und-fakten/versicherungsbereiche/ueberblick-4660; accessed on
10 July 2018.
Market survey: credit reference agencies, motor insurance telematics and health insurance policies 77
tion to the cost problem in the use of eCall technology,72 Unlike credit scoring and telematics-based schemes,
which, from this year, is being installed in every new ve- bonus programmes have generally been measuring the
hicle. The respondents’ frequently expressed fears of a health-related behaviour of policyholders by non-digi-
data monopoly for manufacturers must be seen in this tal means such as voucher booklets and participation
context. certificates and by tallying the points that have been
earned. Scarcely any use is made as yet of tracking by
means of wearable devices or apps, even though an in-
terest in such a development emerged clearly in various
parts of the survey. No use is made, however, of complex
“The pricing of motor insurance statistical processes or even algorithms to establish a
products is tailored very well to the statistical correlation between lifestyle choices and in-
risk profile, thanks to the pricing var- dividuals’ health, which is why there is an urgent need
iables that are already in use today. It to ask some fundamental questions about the fairness
therefore remains to be seen whether of these bonus programmes.
telematics-based tariffs will actually
replace the existing pricing variables
or can at least supplement them.”
“Digitisation, coupled with the trend
towards self-improvement, will im-
Behaviour-based health insurance tariffs, in which pre- pact on the health sector too. Scep-
miums are calculated on the basis of the policyholder’s ticism towards data collection and
continuously monitored, i. e. scored, health-related be- transfer in the case of digital appli-
haviour, do not exist in Germany. It is, however, possible cations and therapies will decrease.
to obtain rewards from almost every statutory health in- When it becomes an everyday occur-
surance fund on submission of evidence of participation rence to disclose their health data,
in healthy activities or in health-promoting measures. customers will also expect to receive
Private health insurers seem not to have established individualised prevention offers and
comparable bonus programmes.73 It appears, moreover, healthcare services. In future there
that only a few policyholders avail themselves of bonus must therefore be more scope to de-
programmes. Indeed, the responses to the survey show vise services and tariffs of this kind.”
that most health insurers have fewer than 10% of their
policyholders on bonus programmes.
Nevertheless, according to the market study, the first
signs of health scoring are emerging in these bonus pro-
grammes, especially those in which participants earn
points, i. e. numerical credits, for their lifestyle choices.
72 Since 31 March 2018, manufacturers have been required to install eCall (short for ‘emergency call’), the automatic in-vehicle emergency calling system prescribed by
the European Union, in all new models of private cars and light utility vehicles. Devices installed in the vehicle automatically report a road accident to the standard
European emergency number 112, thereby reducing the number of road deaths through the speedier initiation of rescue measures. The introduction of eCall
requires, among other things, the installation in each vehicle of an airbag sensor, which signals whether an accident with a risk of injury has occurred, a satellite
receiver, enabling the vehicle to report its location at the time of the accident by GPS and/or Galileo (this is often used in conjunction with the navigation system), a
mobile-phone antenna to send the call to the emergency call centre and an eCall control unit (sometimes integrated into the in-vehicle infotainment system), which
collects the data required for the e-call and establishes phone contact with the emergency call centre.
73 The insurer Generali, however, plans to offer its app-based prevention programme Vitality as part of its health insurance package from late 2018 or early 2019
(https://www.generali.de/ueber-generali/presse-medien/pressemitteilungen/generali-vitality-wird-in-deutschland-weiter- ausgebaut-25562/; accessed on
1 October 2018).
