EC probes market access claims; ‘Insurance market controlled by so few’

Insurance reformers have described as “shocking, but not surprising” reports that a European Commission (EC) investigation into Irish motor insurance is examining allegations that the industry is frustrating access to the market.

Insurance reformers have described as “shocking, but not surprising” reports that a European Commission (EC) investigation into Irish motor insurance is examining allegations that the industry is frustrating access to the market.

The Alliance for Insurance Reform said there was “an urgent need for transparency” and said the vast bulk of the market was controlled by just six companies.

The remarks followed reports on RTÉ yesterday that the EC investigation was now focusing on allegations that the industry had created obstacles for new players to enter the market. The commission conducted a series of searches last year and seized documents from industry body Insurance Ireland.

The investigation is examining an application form that a company wishing to join the group fills out, including an apparent requirement to have sponsorship from an existing member.

Members of the group would then have access to databases, giving companies access to information on penalty points, driver licences, and claims history.

Reacting, the Alliance for Insurance Reform described the reports as “shocking, but not surprising”.

Peter Boland said: “Our members have suspected as much and have been paying the price for years. It is remarkable that such a valuable market, worth more than €2bn, is controlled by so few underwriters.”

He said the media reports highlighted the “urgent need for transparency”.

He called on minister of state at the Department of Finance Michael Darcy to “protect” the new National Claims Information Database from the influence of vested interests.

In a statement, Insurance Ireland insisted it had never refused membership of the association.

It said the number of members had grown from 12 in 2012 to 18 in 2017.

It said that both members and non-members can access the various databases on claims and the driver file.

“Insurance Ireland has cooperated fully with the European Commission in its enquiries and is confident its practices are fully compliant with competition law,” said the statement.

“The European Commission is in an information gathering phase and has not made any findings or raised any objections in respect of membership of Insurance Ireland or otherwise.”

Speaking in the Dáil, Tánaiste Simon Coveney said: “The basis for this inspection was a concern by the commission that the companies involved may have engaged in anti-competitive practices in breach of EU anti-trust rules which prohibit cartels, restrictive business practices and-or abuse of a dominant market position.”

He said the Government is not in a position to comment on the ongoing investigation by the European Commission. But he added: “The Government is absolutely committed to ensuring an insurance market attractive to new entrants, based on a level playing field, and having a competitive environment in order consumers and businesses benefit.”

Fianna Fáil deputy leader Dara Calleary said many people have seen insurance costs rise by between 40% and 60% over the past several years.

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