Six large insurance companies have entered an agreement to regulate the way price information for motor insurance is shared, after the Office of Fair Trading (OFT) deemed previous practices were violating competition laws.
The OFT said insurers were sharing their pricing intentions with brokers who would publish this information on an information exchange program provided by ‘Experian’. Other insurers could then use this information to compare their prices against their competitors and “prevent, restrict or distort competition”, the OFT said.
The insurers involved (Ageas Insurance, Aviva Insurance, AXA Insurance UK, Liverpool Victoria Insurance Company, RBS Insurance Group and Zurich Insurance) agreed to restrict the kind of, and amount of information shared on the program, the OFT said.
The OFT said the deal would stop the potential for price fixing and ensure healthy competition.
“The exchange of future pricing data between competitors has the potential to dampen competition, preventing customers from getting the best value,” said Clive Maxwell, executive director at the OFT.
A copy of the agreement is available at http://www.oft.gov.uk/shared_oft/ca-and-cartels/OFT1395.pdf
