Pricing in the Private Motor & Home Insurance Markets - CCPC Issued Preliminary FindingsSeptember 2020
On 17th September 2020, the Competition and Consumer Protection Commission (CCPC) issued preliminary findings against AIG Europe S.A., Allianz PLC, AXA Insurance DAC, Aviva Insurance Limited, FBD Insurance PLC, Brokers Ireland and AA Ireland Limited.
The investigation alleged that these seven insurance providers engaged in anti-competitive cooperation over a 21-month period between 2015 and 2016 that involved the practice of making competitors aware of forthcoming price increases so they can also be encouraged to increase prices thereby ensuring their customers are less likely to move or switch.
The CCPC has stressed that its findings in alleged price signalling are provisional and no conclusion should be drawn at this stage that there has been a breach. However, it is notable that there appears to be a concerted effort to holistically address pricing in the private car and home insurance markets.
For example, the Central Bank of Ireland published a Dear CEO letter on the 8th of September of phase one of their review of differential pricing highlighting a failure by insurers to acknowledge the utilisation of price differentiation within.
The programme for government, agreed in June, pledged to work to “remove dual pricing” from the insurance market and the publication of the Consumer Insurance Contracts legislation also looks to address the imbalance. Defining pricing strategy clearly and balancing customer and commercial outcomes appropriately seems to be the key driver in ensuring a positive outcome for motorists and homeowners in the insurance market.
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by Eilish Larkin