I ran across an interesting post today about charging overweight people who smoke more for their health insurance. A provocative concept, to be sure.

This is what car companies have done for years. Why not other types of insurance or other industries.

There is risk inherent in any business that might be mitigated through pricing strategies. The total cost of goods sold for most companies includes not only the cost of the physical item they are selling, but also the warranty expenses (which can make or break the profitability of the business in certain categories). What if customers who showed a lower risk for needing technical support in the future (by either their historic return rates, technical proficiency as measured in some test, or some other measure), would get a deal on their purchases of products? I bet the test alone would encourage people to try to fit it themselves a little more aggressively.

Taking it a step further and bundling services with products based on this model. What if car insurance was bundled in the price of the car? The safer the car, the less the insurance.

The next natural step is to turn risk-profile based pricing into use pricing. You pay for the car and the insurance by the mile that you drive, for instance.