EU says Ireland's car insurance industry is restricting competition

European Commission said insurance companies restricted access to its data-sharing system resulting in reduced choices for motorists seeking cover
EU says Ireland's car insurance industry is restricting competition

Insurance Ireland said they are confident they can 'allay' the concerns of the Commission.

The European Commission has said Ireland's insurance industry breached EU antitrust rules by restricting competition in the car insurance market.

Insurance Ireland covers more than 90% of the Irish motor vehicle insurance market. Insurance Ireland members include AIG, Aviva, Axa, FBD, RSA and Zurich.

The charges centre on the Insurance Link database system operated by Insurance Ireland where members share information on claims they have processed. Insurance Ireland said the database is used for anti-fraud purposes.

However, the Commission's preliminary view is that lack of access to Insurance Link has the effect of placing companies at a competitive disadvantage compared to companies that have access to the database.

"The Commission considers that Insurance Ireland arbitrarily delayed or de facto denied access to the system to companies that had a legitimate interest in joining it, and that hurdles remain in place that might affect companies seeking to enter the Irish motor insurance market," the EU Commission said in a statement today.

Insurance Ireland Membership

The Commission said access to the Insurance Link system has been linked to membership of the Insurance Ireland association. "Thus, applicants have to first be eligible for membership, meet membership criteria and go through an unpredictable application process. For several years, certain types of insurers and their agents were not eligible for membership and were therefore effectively denied access. The obligatory membership criteria delayed access for some companies for several years."

Margrethe Vestager, the EU's Vice-President in charge of competition said motor insurance is a significant cost in the budget of every family and business.

"We have concerns that certain insurers and their agents were put at a competitive disadvantage because Insurance Ireland denied or delayed access to its data-sharing system, compiling valuable information on insurance claims," she said.

"This prevented competitive entry of new players and thus reduced Irish drivers' choice of motor insurance policies at competitive prices. Non-discriminatory access to data sharing systems is important to foster competition in markets relying on data.”

In a statement to the Irish Examiner, Insurance Ireland said the Statement of Objections is just a preliminary view and is not the European Commission’s final decision.

"Insurance Ireland will now have an opportunity to respond to the Statement of Objections over the coming weeks."

"Over the last four years, Insurance Ireland has cooperated with the investigation of the European Commission and we will continue to do so through this stage of the process. We will now assess the points set out by the European Commission and we are confident that we can allay the European Commission’s perceived concerns."

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