What AI looks at when pricing your insurance
Modern insurance pricing algorithms analyse far more than traditional actuarial models. Beyond age, claims history, and property details — AI systems may analyse your credit score, behavioural data from telematics devices, how long you spent filling in the application form, your payment method and history, and data purchased from third-party data brokers.
The loyalty penalty problem
One of the most documented problems with AI insurance pricing is the loyalty penalty — where customers who renew with the same insurer year after year often pay significantly more than equivalent new customers. The UK's FCA banned loyalty pricing penalties in general insurance in 2022. The practical response: compare quotes at renewal and switch if you are paying significantly more than the equivalent new customer price.
Disputing an insurance AI decision
Request the reasons for any decision in writing. If the explanation involves inaccurate data — incorrect claims history, credit check error — correct the underlying data and request reconsideration. File complaints with your financial regulator (FCA in UK, ASIC in Australia, state insurance departments in the US) or the relevant ombudsman if you believe discrimination occurred.
