Home Industry News OFT : formal commitments from motor insurers, agree to limit data exchange

OFT : formal commitments from motor insurers, agree to limit data exchange

0 1

Six insurance companies and two IT software and providers gave their commitment to the OFT to limit the data exchanged between them.

The following companies have agreed to the commitments following an OFT consultation: Insurers Ageas Insurance Ltd (formally Fortis Insurance Ltd), Aviva Insurance UK Ltd, AXA Insurance UK plc, Liverpool Victoria Insurance Company Ltd, RBS Insurance Group Ltd, and Zurich Insurance plc – UK Branch; and IT software and service providers Experian Ltd and SSP Ltd.

An OFT investigation identified an increased risk of price coordination among motor insurers using a specialist market analysis tool provided by Experian called Whatif? Private Motor.

The Experian tool allowed insurers to access not only the pricing information they themselves provided to brokers, but also pricing information supplied by other competing insurers.

The OFT warned the firms that, because insurers were able to access information about their competitors’ future pricing intentions, the information exchanged through WhatIf? Private Motor raised competition law concerns, in particular that it could potentially be used to coordinate on price.

The formal commitments address these concerns by ensuring that the companies will exchange pricing information through the analysis tool only if that information meets certain principles agreed with the OFT. These principles require the information, if less than six months old, to be anonymised, aggregated across at least five insurers and already ‘live’ in broker-sold policies.

Having accepted the commitments, the OFT has ended its investigation and will not be proceeding to a decision on whether or not the Competition Act has been infringed.

Clive Maxwell, Executive Director at the OFT, said:

‘The exchange of future pricing data between competitors has the potential to dampen competition, preventing customers from getting the best value.

‘We have been able to address our concerns by accepting commitments that reflect the specific features of this market. These limit data sharing while ensuring a certain level of information remains available to potential new competitors, in particular smaller firms, to encourage entry into and healthy competition in the market.’

Source : OFT