OFT warns insurers over data exchange
SEVEN insurance companies, including industry giants Aviva, Royal Sun Alliance and AXA, have agreed to limit the exchange of data between them after a watchdog body raised concerns over competition law.
An investigation by the Office of Fair Trading (OFT) identified “an increase risk of price co-ordination” among motor insurers using a market analysis tool from business information group Experian, known as Whatif? Private Motor.
The four other insurers named by the OFT following its inquiry include Ageas Insurance (formally Fortis Insurance), Liverpool Victoria Friendly Society, RBS Insurance Group and Zurich Insurance.
Experian and another insurance technology firm, SSP, have also joined the seven insurers in offering formal commitments to the OFT to limit access to pricing information.
The OFT said it had limited the scope of its investigation to a small number of parties with a view to achieving a swift and effective outcome. However, the investigation potentially had wider implications as the Experian tool was just one of several similar products used in the insurance industry.
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The tool allowed insurers to access not only the pricing information they themselves provided to brokers but also pricing information supplied by other competing insurers.
Clive Maxwell, executive director at the OFT, said: “Active competition between firms drives better value for consumers and growth for the economy, and anything that potentially dampens that is a cause for concern.
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“The OFT treats possible breaches of competition law very seriously, but we believe that formal commitments in this case would be a proportionate way of resolving our concerns.”
Although motor insurance premiums have risen steeply in the past year, the Association of British Insurers (ABI) insisted yesterday that the rise was due to a combination of increased fraud and personal injury costs, rather than a lack of competition among insurers.
An ABI spokesman said: “As the OFT has made clear, it has not made a finding of an infringement of competition law today”.