The service, aimed at those buying or driving their first car, is accessible via an app on Facebook, and asks users to connect through the social media site before being given a quote, says Admiral.
However, as the service was preparing to launch this week, Facebook barred Admiral from using social media data to inform policy prices.
The last-minute decision from Facebook came after Admiral had already publicised the new service.
Through its firstcarquote site, Admiral said: "We do not have access to customers' Facebook data, and never had access to anything that customers didn't voluntarily share with us."
Speaking to PRWeek sister title Campaign, a spokesman for Admiral said: "Firstcarquote, which will allow first-time drivers to voluntarily share some social data with insurers for a simple and discounted quote, is currently a beta product. Admiral does not have access to customers' Facebook data and does not hold social media data to set prices for its customers."
With the story covered prominently by a number of media outlets yesterday, Admiral took to social media to reaffirm its position:
In response to today's coverage, we'd like to assure customers Admiral doesn't use social media data to set prices for its policyholders 1/3— Admiral Insurance (@AdmiralUK) 2 November 2016
We haven't and don't access Admiral policyholders' Facebook data 2/3— Admiral Insurance (@AdmiralUK) 2 November 2016
We've launched a new brand called https://t.co/lIZT6HOODj for new drivers. They can get a quicker & cheaper quote via Facebook 3/3— Admiral Insurance (@AdmiralUK) November 2, 2016
As a result, Admiral Group's share price dropped from 1,938p on Tuesday (Nov 1) to 1,888p when trading opened this morning (Tuesday, 3 November). by 10am, it had recovered to 1,907p.
Admiral's declaration that it would not use social media data to set prices was not much comfort to some on social media.