How much does your insurer really know about you? It could be more than just what’s on your application form for the policy.

Insurers have long been allowed to use what they know about us to charge different prices for the same level of cover, albeit within some tight rules.

Recent media coverage about how Australian insurers set their premiums has shone a spotlight on just how much unconventional data may factor into this equation.

It has also raised concerns about the possible risks of discrimination as insurers gain access to more and more detailed data, increasingly drawing on external sources and artificial intelligence (AI). It’s worth understanding where this information comes from and how it is allowed to be used.

What data do insurers have and where does it come from?

When you apply for an insurance quote, you disclose personal and policy details that vary by cover type. These can range from details about your age and health to driving history or property information.

Publicly available information, such as Census data, adds to this picture.

Insurers also have access to your claims history. Some can also draw on behavioural and relationship data, such as payment frequency, policy duration, and likelihood of switching.

The world of big data

Then there’s big data, and the third-party firms able to turn this information into products that can be marketed to insurance companies.

Sometimes, these products are produced through sophisticated analysis of public data to produce usable insights. For example, in the........

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