Competition Investigation in the Irish Motor Insurance Sector

On 13 September 2016, Ireland's Competition and Consumer Protection Commission ("CCPC") announced that it had issued: (a) witness summonses; and (b) information requests to various parties in the motor insurance sector in Ireland.

The CCPC is the competition and consumer agency in Ireland; it came into existence on 31 October 2014 following the amalgamation of the Competition Authority and the National Consumer Agency.

The CCPC has stated that witness summonses and information requests were sent to major motor insurance providers and industry groups representing insurers and brokers.

The background to the matter was described by the CCPC when it stated that it "is currently investigating suspected breaches of competition law in the motor insurance sector. The investigation relates to industry participants openly signalling up-coming increases in motor insurance premiums in the State."  This could involve an application of the theories of "price signalling" to the motor insurance sector. 

The CCPC Chairperson, Isolde Goggin, said in a statement at the time that:
"markets work best where businesses vigorously and independently compete against each other for customers. Statements signalling future pricing predictions or intentions may result in a degree of unspoken coordination, which may breach competition law. Statements by senior industry players have raised serious suspicion as to whether there is a link between these messages and subsequent price increases. The evidence collected through both the witness summonses and the information requests will assist us in establishing whether there has been a breach of competition law.  The CCPC has been monitoring the motor insurance industry and we know from our contacts with consumers that the sharp rise in motor insurance premiums has had a significant impact on them. We continue to closely monitor developments and will, if necessary, take action to stop specific anti-competitive practices in the motor insurance sector."  Interestingly, she also asked for evidence saying "if anyone believes they have evidence of a breach of competition law in the motor insurance sector we would ask them to contact the CCPC.”

A "study" had been undertaken of the non-life insurance sector which was published in 2005 but this more specific than a general study.  The CCPC has not published any timeline or roadmap for the present investigation.  The output will be studied carefully not only in the context of motor insurance but also in regard to any thinking by the CCPC on the evolving but somewhat unclear topic of price signalling.

For further information, contact Dr Vincent Power or your usual contact in A&L Goodbody's EU, Competition and Procurement Group.  

Date published: 15 December 2016