The UK Office of Fair Trading (OFT) announced on 13 January 2011 that seven insurance companies (Ageas Insurance Limited (formally Fortis Insurance Limited), Aviva plc, AXA Insurance UK plc, Liverpool Victoria Friendly Society, RBS Insurance Group Limited, Royal Sun Alliance and Zurich Insurance plc), and two IT software and service providers (Experian Limited and SSP Limited) have offered formal commitments to limit the type of information shared through a specialist market analysis tool. This follows an OFT investigation that identified an increased risk of price coordination among motor insurers using this tool.
The exchange of information facilitated by this tool raised competition law concerns because:
- insurers were able to access individualised and highly disaggregated pricing data across most private motor insurers in the broker market;
- the pricing information was not genuinely public information;
- insurers were able to access information about their competitors' future pricing intentions; and
- the tool was updated and provided to subscribing insurers on a regular basis.
Under the formal commitments proposed, the insurers will no longer be able to access each other's individual pricing information through the tool. Rather, the pricing information exchanged will be anonymised, aggregated across at least five insurers and already 'live' in broker-sold policies.
The OFT will consult on the full text of the proposed commitments shortly. Assuming that they are subsequently accepted by the OFT, the OFT will then terminate its investigation.
The OFT limited the scope of its investigation to a small number of parties, to facilitate a "swift and effective outcome". However, the OFT has noted that it is "aware that similar market analysis tools exist both in motor and other insurance markets and [urges] companies using them to ensure that they are complying with competition law".