Life insurance AI underwriting uses social and behavioural data — ASIC review flags privacy and fairness concerns
Multiple life insurers
What happened
ASIC's review of insurance sector AI (2023) found multiple life insurers using AI underwriting models that incorporated non-traditional data sources including social media activity, behavioural analytics, fitness tracker data, and location patterns as proximate indicators of health risk. The models were found to potentially proxy for protected attributes including disability status, mental health history, and geographic disadvantage. ASIC raised concerns about transparency — applicants were not informed their social data was being used in underwriting decisions.
Outcome
ASIC issued industry guidance on use of non-traditional data in insurance underwriting. APRA CPG 234 guidance extended to insurance AI models.
Cite this incident
https://corporateai.com.au/incidents/life-insurance-ai-2023Quick facts
- Date
- 1 January 2022
- Organisation
- Multiple life insurers
- Sector
- Insurance
- Severity
- Medium
- Regulatory bodies
- ASIC / APRA
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