This is the exact opposite of what economics would predict. If you have a greater risk than your friend, then you will pay more because your expected risk is higher. In perfect competition, your rate would be equal to your expected return (that is, the premiums would match the expected payout).

So, if an insurer can identify that you have a greater risk than your friend, in perfect competition you would pay a higher rate. No insurer with perfect knowledge of risk would allow you to pay less than that, because they’re expected return would be negative.

I was assuming they were concerned about you being charged more than the cost of providing the insurance. If the supposed dystopia is indeed merely the reality where everyone gets charged the cost of providing the service I have to ask how exactly you think things work right now.

Competition and free market is not always the best solution to all the problems. In this case, what if all insurance companies are allowed to build such profiles? They all rely on that creepy data hoarder that built the shitty profile on you.

In that case the companies will compete to give you competitive yet higher than others quotes to YOU(as they can see).

What competition? Oh, you mean those companies on the second page of the search results?

Lack of ability for companies to advertise to you seems like a distinct concern from that of how much information they have about you, let's take it one at a time!

> Lack of ability for companies to advertise to you seems like a distinct concern

It's not about "lack of ability to advertise", it's about someone being able to heavily manipulate the perceived availability of competition (which is much more important than the real availability of competition). And that someone is the same someone that helps the companies manipulate the price (hint: it's Google).