What 'data' they use is very complicated. Let me give an example.
I'm in Ontario, Canada where insurance companies used to use your credit score as part of the calculation. Personally I think it is reasonable if that's what their actuaries figure out. It's not unusual to think people with bad credit are more irresponsible and so might be at higher risk when driving. Not all the time, but along the same risk pool as say age, gender, or location...
That metric was challenged by anti-poverty groups saying it unfairly punished the poor. On some level, that is true. On another level, it actually hurts the poor. I was part of the 'responsible poor' growing up. Never went into debt, was careful with money and I was working since I was like 12 years old. I did however live in a 'high-risk location' So how would the insurance company differentiate me from someone else when I am doing my most to be responsible and I think I should be a lower-rate?
It's just complicated is what it is and nothing is easy.
Personally, I think the more 'detailed' the risk being calculated, the more it should be a discount as opposed to being used to raise rates. Just for example, when I do my insurance, I get a discount if I state I use winter tires. Similarly, tracked driver behavior should be used as a discount. Ideally and I think by law in my view, it should be an explicit app by the insurance company. I know a few companies in Ontario, Canada that say they do this. They offer discounts if you install their app and drive well. Now I don't trust this is all they are doing, even if maybe I can, so I haven't installed the apps. But that is certainly a better way to do it.
The last part of insurance being risk-sharing from extraordinary events is also a big thing. However, we again get a catch-22 situation. That's the kind of insurance I want, but due to regulations, that's actually impossible where I live. The government mandates certain minimum benefits. Lobbyists like rehab facilities and what not pressure the government to keep those in place so they have a constant stream of money. There were even scandals with coordination between criminals purposefully causing accidents, then funnelling money to rehab facilities, tow-trucks, and repair shops... then milking the insurance companies.
It's a vicious game. Insurance is simply not just risk sharing against extraordinary events in life. Government rules typically move against that for better of for worse. When people get insurance they think it covers everything. Just think about health insurance. How often do people complain their claim is rejected unfairly when maybe according to their policy, it should actually be rejected? So government typically steps in and starts saying you have to cover this and that, and it stops being about risk sharing against extraordinary events.