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Top motor insurers in alleged anti-competitive cooperation

A number of top motor insurance companies in Ireland have engaged in anti-competitive cooperation, the Competition and Consumer Protection Commission (CCPC) has alleged.

In its preliminary findings, the CCPC named the companies as AIG Europe, Allianz, AXA Insurance, Aviva Insurance, FBD Insurance, Brokers Ireland – formerly the Irish Brokers Association – and AA Ireland.

These findings allege that these organisations engaged in anti-competitive cooperation over a 21-month period during 2015 and 2016.

The findings allegedly 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.

The CCPC opened its investigation in 2016, and said “the findings are provisional and no conclusion should be drawn at this stage that there has been a breach of competition law”.

The activities under investigation include a practice which is commonly referred to as “price-signalling”. This occurs when businesses make their competitors aware that they intend to increase prices, in turn causing further price increases across the sector.

Price signalling can happen in public, through announcements or comments on prices, or in private through direct contacts between companies.

If a business knows that their competitor is increasing prices then they may be encouraged to also increase prices, since their customers are less likely to move to their competitor, the CCPC said.

It said the companies named now have the opportunity to consider and respond to its preliminary findings, and it will “carefully consider” any responses before deciding if it will bring civil court proceedings or take some other course of action.