Motor insurance companies face allegations of anti-competitive cooperation

Motor insurance companies face allegations of anti-competitive cooperation

Some of the biggest motor insurance companies in Ireland have engaged in anti-competitive cooperation, the competition watchdog has alleged in preliminary findings.

The Competition and Consumer Protection Commission (CCPC) today issued preliminary findings to AIG Europe S.A., Allianz PLC, AXA Insurance DAC, Aviva Insurance Limited, FBD Insurance PLC, Brokers Ireland (formerly the Irish Brokers Association) and AA Ireland Limited.

The preliminary findings allege that these organisations engaged in anti-competitive cooperation over a 21-month period during 2015 and 2016. The alleged anti-competitive cooperation consisted of public announcements of future private motor insurance premium rises as well as other contacts between competitors, all of which reduced levels of competition between the parties.

In a statement issued earlier this afternoon, the watchdog, which opened its investigation in 2016, stressed that its “findings are provisional and no conclusion should be drawn at this stage that there has been a breach of competition law”.

The anti-competitive cooperation activities under investigation include a practice commonly referred to as ‘price-signalling’, whereby businesses make their competitors aware that they intend to increase prices, in turn causing further price increases across the sector.

In the course of the investigation, the CCPC gathered a substantial amount of electronic material from relevant parties, as well as extensive oral testimony and documentary evidence through witness summons hearings and meetings.

With the assistance of digital forensic tools, the CCPC conducted a detailed review and assessment of all of the evidence gathered, including information in the public domain such as press articles and financial reports.

The CCPC has now issued preliminary findings to these organisations setting out its position that it has reasonable grounds to suspect that a breach of the law has occurred. The relevant parties now have the opportunity to consider and respond to the preliminary findings.

It is open to the parties to engage with the CCPC to offer commitments regarding their future behaviour to address the CCPC’s competition concerns. The CCPC will carefully consider any responses before deciding if it will bring civil court proceedings or to take some other course of action.

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