Pragmatics of Uncertainty

Insurance and the new datafication of uncertainty (INDU)

Funded by Research Council of Finland, 2023–2027

Insurance institutions form a crucial infrastructure in contemporary societies, as they pool and distribute risk, produce welfare, and build up trust that backs up economic activity. Within the insurance industry, it has been widely assumed that big data and artificial intelligence will disrupt the business at every operational scale. Through techniques such as data analytics, machine learning, and automated decision-making, insurance is datafied in a new way, which could have far-reaching societal consequences. Yet, the industry’s discourse is often characterized by hype and loose promises – if not mere guesswork – about what might take place in the future. At the same time, social scientific analyses on the theme have often been based more on critical assumptions than knowledge of actual changes in the field. The Insurance and New Datafication of Uncertainty (INDU) research project will offer a corrective to both over-optimistic industry views and superficial criticism by empirically examining real-world insurance activities. The main research question of the project is: To what extent and how are the new forms of datafication disrupting existing insurance infrastructures and practices?      

The INDU project aims to develop profound insights into the ways in which new digital technologies are transforming insurance, not only as a practice but also as an idea, and what kinds of societal effects the change has. This will be done by conducting subprojects to empirically investigate four fields currently undergoing intensive datafication: life insurance, car insurance, climate change-related (re)insurance, and cyber insurance. The four case studies clarify how datafication influences the practices of distributing risk and sharing responsibility through insurance. In addition, they form the basis upon which INDU will be able to provide a richer and more nuanced overall picture of how the insurance industry is affected by the new technologies; such a holistic perspective has thus far been lacking both in the industry’s own discourse and in social critiques. Thus, the project also provides well-grounded empirical information that can spark critical discussion and analysis. 

Valuable breakages: repair and renewal of algorithmic systems (REPAIR) 

Consortium funded by The Strategic Research Council (SRC/STN), 2022–2025

The PRONE team participates in this consortium with research that focuses on cyber insurance. The short description of the consortium in its whole is as follows: 

The rapid expansion of digital infrastructures and algorithmic systems generates new and unforeseen societal interdependencies and vulnerabilities. Driven by pressures to do more with shrinking resources, public sector authorities are deploying and planning to deploy automated service delivery. The pursuit of efficiency, combined with the lack of well-defined operational models and insufficient regulatory oversight, creates pressure towards the welfare society and its values including openness, equality, and autonomy. Yet, algorithmic systems can also work as a positive force that supports human productivity, sustainable uses of resources and more inclusive delivery of public service. 

REPAIR brings together leading scholars and experts on societal, organizational, legal and human aspects of algorithmic systems aiming to align them with the goals and values of the welfare society.

By working with technical experts and public and private organizations developing and using algorithmic systems, REPAIR seeks to establish new and creative ways to research and promote sustainable algorithmic futures.

Decision support to manage the long-term growth of environmentally induced multihazard risks in urban areas (LONGRISK) 

Consortium funded by the Academy of Finland, 2020-2023. 

LONGRISK develops decision support for integrated management of environmentally induced multi-hazard risks with three objectives: 1) Define a common conceptual framework for characterization and management of environmentally induced multi-hazard risks in different urban settings in Finland. 2) Boost the management capacities of Finnish cities against the build-up of long-term multi-hazard risks with the help of scenario-based exercises. 3) Develop an integrated suite of decision support tools for multi-hazard risk management, including a simulation exercise protocol in which quantitative multi-hazard risk scenarios are enhanced with interactive visualization software. To achieve these objectives, LONGRISK develops and tests the decision support tools by organizing simulation exercises (Situation Rooms, SRs) on environmentally induced multi-hazard risks with three Finnish case cities: Helsinki, Tampere and Kotka (WP3). SRs build on a common conceptual framework for environmentally induced multi-hazard risk management (WP1) and risk scenarios supported by EU’s satellite-based Copernicus Earth observation data coupled with Bayesian impact assessment models (WP2). These tools enable high-level urban policymakers in Finland to prioritize urgent strategic risk management actions with evidence-based precautionary methodologies that incorporate long-term development (WP4). Knowledge co-production workshops and training sessions with other Finnish cities, NGOs, businesses and officials ensure wider capacity building (WP5, WP6). LONGRISK is pertinent to the Academy of Finland call on crisis management and security of supply. It increases understanding of complex crises in urban areas by developing a conceptual framework to manage environmentally induced multi-hazard risks in Finland, and advances anticipation and resolution of such risks with Situation Room exercises organized with three pilot cities. It builds on interdisciplinary research themes on crisis preparedness by developing an integrated approach to forecasting, preventing and adapting to environmentally induced urban risks. It also produces research-based data on crisis preparedness and security of supply by exploiting Copernicus Earth observation data to visualize disruption scenarios and adaptation pathways. 

The most challenging societal crises today are slowly developing cascades of complex socio-environmental disruptions, such as the series of disasters witnessed across Europe as a result of snowstorms, floods, droughts and fires. As hubs of population, economic activity and critical infrastructure, cities often suffer the most. To prioritize today’s actions based on critical long-term impacts, LONGRISK develops decision support for integrated management of environmentally induced multi-hazard risks in urban areas. We organize Situation Room exercises in Helsinki, Tampere and Kotka in Finland to develop a detailed protocol for Finnish cities to manage the build-up of complex long-term risks. The exercises are enhanced with interactive modeling relying on Copernicus Earth observation data. LONGRISK’s integrated decision support tools will help prioritize public and private investment and other strategic risk management options in cities.

Creative adaptation to wicked socio-environmental disruptions (WISE) 

Funded by the Strategic Research Council of Academy of Finland (SRC/STN), 2018–2023 

WISE has two research challenges: 1) decision making over wicked socio-environmental disruptions and evaluation of long-term decision outcomes; 2) build-up of resilience and adaptation to wicked socio-environmental disruptions with decision support. WISE tackles the challenges mainly by developing and testing a new national and local level integrative policy mechanism, Policy Operations Room (POR), which has the capacity to design rapid, evidence-based and long-term adaptation policies to unexpected socioenvironmental disruptions with multiple drivers and impacts. POR consists of war-room-like simulation exercises in which participants mimic how they would decide in a real-life disruption. POR draws on national and international experts to develop a test bed for integrating rapid and far-sighted science advice to the most complex  policy challenges facing a small and transnationally exposed nation state like Finland. The most challenging socio-environmental disruptions are wicked: the drivers are complex, decision options are tightly coupled, and solutions generate new problems. Wicked disruptions threaten sustainable development and growth, the safeguards of which are resilience (capacity to absorb socio-environmental disruptions) and adaptation (recovery after disruption). WISE builds up resilience and adaptation with support from unbiased and best available scientific evidence. Research objectives: 1) To develop decision-making procedures that prevent decisions made under time pressure from paving the way to unwanted socio-ecological disruptions decades into the future. 2) To develop actions for building up resilience infrastructure and adaptive learning processes to counter wicked socio-environmental disruptions. 3) To apply the WISE findings on urgent long-term decision-making to Finland’s strategy for coping with future risks such as the COVID-19 pandemic. Interaction objectives: 1) To develop and use POR as an instrument for science-policy interaction to enhance resilience and adaptation. 2) To disseminate findings on science-policy governance to enhance resilience and adaptation. 3) To build a web-based workshop tool and a network of agents to enhance resilience and adaptation. 

WISE aims 1) to improve decision making over wicked socio-environmental disruptions and the evaluation of decision outcomes, and 2) to build-up resilience and adaptation to wicked socio-environmental disruptions with decision support. WISE develops and tests a new national-level integrative policy mechanism, Policy Operations Room (POR), which has the capacity to design rapid, evidencebased and long-term adaptation policies to unexpected socio-environmental disruptions with multiple drivers and impacts. POR consists of war-room-like simulation exercises in which participants mimic how they would decide in a real-life disruption. POR draws on national and international experts to develop a test bed for integrating rapid and far-sighted science advice to the most complex policy challenges facing a small and transnationally exposed nation state like Finland.

Insurance and the Problem of Insecurity (INSPRINS) 

Funded by the Academy of Finland, 2015–2018 

The primary researchers working in the project, in addition to the Principal Investigator Lehtonen, were Lotta Hautamäki, Liina Sointu and Mikko J. Virtanen; also Jyri Liukko participated actively in its work, although he was employed by the Finnish Centre for Pensions. 

The project studied insurance as a key means for encountering the problem of insecurity in the contemporary societies. Because of its wide usability and efficiency, during the past one hundred years powerful institutions and businesses have been built around insurance technology. On the one hand, insurance has been at the core of welfare state construction, providing a tool with which to operationalise the ideas of shared responsibility and social justice in face of insecurity. On the other hand, during the same time, insurance has become a hugely influential sector within capitalist economies. The INSPRINS project aims at providing a holistic view on how insurance is used in the contemporary societies to manage the problem of insecurity. The main questions of the project are the following: How is the problem of insecurity encountered and managed with the use of various insurance tools? And what kind of societal effects does the reliance on insurance rationality have?

The project studies insurance as a key means for encountering the problem of insecurity in the contemporary societies. Because of its wide usability and efficiency, during the past one hundred years powerful institutions and businesses have been built around insurance technology. On the one hand, insurance has been at the core of welfare state construction, providing a tool with which to operationalise the ideas of shared responsibility and social justice in face of insecurity. On the other hand, during the same time, insurance has become an influential sector within capitalist economies, as it has channelled private savings into huge funds that affect the whole global economy. Although in recent years there has emerged a new sociology of insurance, which richly thematises these questions, some key issues have still drawn too little attention. To begin with, in social scientific analyses, the private and public side of insurance are still too often examined separately, thus leading to an ignorance of their fundamental intertwinement. Second, the sociology of insurance has not often been able to analyse at one go the different scales on which insurance rationality can operate. Third, the co-dependence of different infrastructures and insurance remains too little studied. In addressing these themes, the INSPRINS project aims at providing a more holistic view on how insurance is used in the contemporary society to manage the problem of insecurity. The main questions of the project are the following: How is the problem of insecurity encountered and managed with the use of various insurance tools? And what kind of societal effects does the reliance on insurance rationality have? These questions are studied in five subprojects which operationalise and concretise the main questions into empirical research cases and respective subquestions: -How do economic, political and moral considerations affect each other and become intertwined in the case of health insurance? -How do insurance experts make decisions on disability insurance and rehabilitation benefits? -How is the need for more security advertised by insurance companies, and how do they address their potential customers? -What is the role of insurance in the management of energy infrastructure systems and their security? -How is the insecurity created by climate change actively incorporated in reinsurance companies’ business practices?