Motor Insurers Broke Competition Rules

18 Jun 2021 | 12.07 pm

Motor Insurers Broke Competition Rules

EU's Vestager lashes restricting access to data sharing system

18 Jun 2021 | 12.07 pm

EU competition policy boss Margrethe Vestager has slammed Irish motor insurers for restricting competition in the motor insurance market, thereby breaking EU antitrust rules.

The European Commission has told the insurers association Insurance Ireland that it had “arbitrarily delayed or de facto denied access to” the Insurance Link platform, a data sharing system which the association administers.

Vestager (pictured) stated: “Motor insurance is a significant cost in the budget of every family and business. 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. Non-discriminatory access to data sharing systems is important to foster competition in markets relying on data.”

Denied Access

A Commission statement said: “The Commission’s preliminary findings show that Insurance Ireland arbitrarily delayed or de facto denied the access of certain insurers and their agents to Insurance Link. Since at least 2009 and until today, access has been linked to membership in the association.

“Thus, applicants have to first be eligible for membership, meet membership criteria and go through an unpredictable application process. For several years, certain types of insurers and their agents were not eligible for membership and were therefore effectively denied access. The obligatory membership criteria delayed access for some companies for several years.

“The Commission’s preliminary view, outlined in its Statement of Objections, is that 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. Lack of access to the relevant data contained in Insurance Link also has an effect on cross border trade between Member States, resulting in the potential partitioning of the Single Market.

“If confirmed, this would infringe Article 101 of the Treaty on the Functioning of the European Union (TFEU). The sending of a Statement of Objections does not prejudge the outcome of an investigation.”

The EU’s ‘Statement of Objections’ is the first step towards a full antitrust investigation, and Insurance Ireland can reply with a rebuttal or assent before any such step is taken.

Insurance Ireland said it has cooperated with the Commission’s investigation up to this point and will continue to do so.

The organisation stated: “It is important to note that the Statement of Objections sets out the European Commission’s preliminary views only and is not the European Commission’s final decision.  Insurance Ireland will now have an opportunity to respond to the Statement of Objections over the coming weeks.

“Over the last four years, Insurance Ireland has cooperated with the investigation of the European Commission and we will continue to do so through this stage of the process. We will now assess the points set out by the European Commission and we are confident that we can allay the European Commission’s perceived concerns.”

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