I would favour indiviualised pricing and I don't think it would be too hard to achieve without getting too invasive. Basically, your driving record should speak for itself over time.

The problem would be that approach is that insurance companies want to be able to keep an element of fuzziness in their pricing. Predictable pricing is the last thing they want. Why do they only care about beating your current quote, but have no interest in what you were paying for insurance in years gone by? If you have a 10+ year history of perfect driving in dull boring cars, how can insurance companies significantly increase your premium without being able to justify why they suddenly think you are now riskier?

By putting people in buckets they can adjust prices without singling anyone out, and as a by product keep the consume a bit confused abut what is going on.

I see it happening all the time. Drivers with no claims, no points, no convictions and who drive safe, dull dull cars suddenly having the premiums increased. Its not because of them or what they did, its because the insurance company decided to put them in a bucket that justified a price hike.