Irish motor insurers ‘restricted competition’, European Commission says

Insurance Ireland breached EU antitrust rules by restricting competition in the car insurance market, the European Commission has said.

The preliminary finding comes after the commission opened a formal antitrust investigation into the organisation in May 2019 to assess whether it was operating a cartel.

The investigation is focused on whether restricting access to Insurance Ireland’s data-pooling system solely to members left other insurers at a competitive disadvantage.

The commission’s findings indicate Insurance Ireland arbitrarily delayed or de facto denied access to other insurers and their agents to its Insurance Link system.

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“Lack of access to Insurance Link has the effect of placing companies at a competitive disadvantage on the Irish motor vehicle insurance market in comparison to companies that have access to the database. This affects negatively costs, quality of service and pricing. It also acts as a barrier to entry and thus reduces the possibility of more competitive prices and choice of suppliers,” the commission said on Friday in a statement.

If the claims are confirmed this would represent an infringement of Article 101 of the Treaty on the Functioning of the European Union (TFEU). This prohibits anti-competitive agreements and decisions of associations of undertakings that prevent, restrict or distort competition within the EU’s single market.

Insurance Ireland is an association that counts over 90 per cent of the Irish motor vehicle insurance market as members. Its members include FBD, Aviva, Allianz, RSA, AIG, Liberty Insurance and Zurich.

The investigation into the organisation began following a series of raids on insurers in mid-2017 by bodies that included the Competition and Consumer Protection Commission.

Contract conditions

European Commission executive vice-president Margrethe Vestager said: "Access to data is key for insurers to evaluate the risk they take and to offer competitive contract conditions to customers.

“We have concerns that certain insurers and their agents were put at a competitive disadvantage because Insurance Ireland denied or delayed access to its data-sharing system, compiling valuable information on insurance claims.

“This prevented competitive entry of new players and thus reduced Irish drivers’ choice of motor insurance policies at competitive prices,” she said.

“Non-discriminatory access to data-sharing systems is important to foster competition in markets relying on data,” Ms Vestager added.

The commission’s initial conclusions are included in a statement of objections, which has been presented to Insurance Ireland.

Opening a formal antitrust investigation and sending statement does not prejudge the outcome of the investigations, the commission said.

Insurance Ireland stressed the commission’s statement did not represent a final decision in the investigation. It said it has co-operated with the commission during the process and would continue to do so.

The organisation added it was confident it could allay any concerns, and would respond to the commission’s statement in the coming weeks.