European Commission launches formal investigation into Insurance Ireland

The European Commission is formally investigating whether Insurance Ireland is reducing drivers’ choice of insurance policies by preventing companies from being included in a pool of firms offering cover.

The commission has opened a formal anti-trust investigation into Insurance Ireland which administers and makes available the Insurance Link database to its member companies.

The member companies then contribute insurance claims to the database on an ongoing basis.

The commission said the purpose of the system is to facilitate the detection of potentially fraudulent behaviour by insurance claimants and to ensure the accuracy of information provided by potential customers to insurance companies and/or their agents.

“The Commission does not question that data pooling arrangements can contribute to effective competition,” it said.

“The participation in and access to a data pool by insurance service providers may directly benefit consumers in terms of ensuring more suitable products and competitive prices.”

However, it said in the case of Insurance Ireland, it is investigating whether the conditions imposed on companies wishing to participate in and access the Insurance Link database “may have had the effect of placing these companies at a competitive disadvantage on the Irish motor insurance market in comparison to companies already having access to the database”.

“Data pooling arrangements are often pro-competitive,” it said. “Participation in and access to a data pool by service providers may directly benefit consumers by enabling effective competition on the market.

“By accessing and participating in a data pool, service providers may be able to offer better prices and services to consumers. Access to data within a data pool may also enable effective market entry and thus may result in improved choice of services and suppliers to the benefit of consumers.

However, in some situations, data pooling arrangements may lead to restrictions of competition. This may be the case, for example, where the conditions of access to and participation in a data pool result in placing certain market operators at a competitive disadvantage or where the data pooling system enables market operators to become aware of the market strategies of their competitors.”

It said the opening of this formal investigation follows inspections carried out in the insurance market here in July 2017.

After those inspections at the premises of companies active in motor insurance, the commission said it had concerns that the companies involved may have engaged in anti-competitive practices in breach of EU antitrust rules that prohibit cartels and restrictive business practices and/or abuse of a dominant market position.

Announcing this latest investigation, Commissioner Margrethe Vestager, in charge of competition policy, said: "Insurance is essential for all car drivers in Europe.

We are investigating whether companies wishing to offer their services on the Irish motor insurance market may have been unfairly prevented from accessing a data pool managed by Insurance Ireland for its member companies. This could potentially reduce Irish drivers' choice of motor insurance policies at competitive prices.

In a statement, Insurance Ireland said: Insurance Ireland notes that the European Commission has decided to open proceedings in its ongoing investigation. It is important to note that the European Commission has not reached any conclusions or made any findings in respect of Insurance Ireland.

"Insurance Ireland understands that the investigation is focused on the InsuranceLink database, which is a secure database that holds claims information as a tool to assist in fraud detection. InsuranceLink is accessed by Insurance Ireland members and non-members and has been in operation since 1988.

"Insurance Ireland is cooperating fully with the European Commission in its enquiries and is confident its practices are fully compliant with competition law."

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