Consumer data right, insurance contracts and how much choice there really is

Abstract

The Consumer Data Right ('CDR'), introduced in 2019 into the Competition and Consumer Act 2010 (Cth), promised increased competition, innovation and consumer benefit from greater access to data and increased ease of data sharing. So far, the CDR has been rolled out to the banking and energy sectors with non-bank lending to follow, the vision being for the CDR to apply in the future across the entire economy, including to the insurance sector. This article analyses whether insurance underwriting, currently undertaken through a series of webform questions, can be replaced by CDR data requests. We suggest that it can, in addition to the CDR potentially enabling novel underwriting questions to be asked of prospective insureds. The last part of our article demonstrates through a stylised market example that adoption of the CDR in general insurance may not only lead to an effective obligation to share data -contrary to the regime’s opt-in nature - but also unfair pricing for some consumers. These latter real-world effects have so far been insufficiently addressed by policymakers.