The Australian Competition and Consumer Commission (ACCC) has been warned its inquiry into the market power of Facebook and Google could harm the insurance industry.

The ACCC preliminary report on digital platforms proposes allowing consumers to require that their personal information be erased when they have withdrawn consent and it’s no longer necessary for providing a service.

But that won’t work for insurers. The Insurance Council of Australia (ICA) says details collected by insurers in the course of underwriting products and paying claims become actuarial data that is essential to future pricing.

“Enabling consumers to delete data collected about them will have a detrimental impact to the sustainability of the industry,” it says in a submission to the ACCC.

“In addition, insurers often retain personal data after a customer no longer has a current policy with them, in order to continue servicing potential long-tail claims.”

The ACCC also recommends that approval of any merger or acquisition should take into account the removal of a potential competitor and the amount and nature of data that could then be accessed by the acquirer.

ICA says any change would need to be sensibly applied because the scale of data acquired by insurers is different from the vast data sets of Facebook and Google that the ACCC is considering.

“While the inquiry’s preliminary recommendations may be appropriate for digital platforms, further consideration and consultation is required to assess whether the recommendations may be appropriate for other sectors.

“The general insurance sector, in particular, differs in terms of business models, scale and the large body of regulation to which it is subject.”

The ACCC’s final report is due on June 3.