Insurance Ireland has violated EU antitrust rules by restricting competition in the motor insurance market, the European Commission said.
The preliminary result comes after the Commission opened a formal antitrust investigation into the organization in May 2019 to determine whether it was operating a cartel.
The investigation focuses on whether restricting access to Insurance Ireland’s data pooling system to members only has put other insurers at a competitive disadvantage.
The Commission’s findings suggest that Insurance Ireland arbitrarily delayed or de facto denied access to its Insurance Link system to other insurers and their agents.
“The lack of access to Insurance Link puts companies at a competitive disadvantage in the Irish motor insurance market compared to companies that have access to the database. This has a negative effect on costs, service quality and pricing. It also acts as a barrier to entry, reducing the possibility of more competitive pricing and supplier choice, ”the commission said in a statement on Friday.
If the allegations are confirmed, it would constitute a violation of Article 101 of the Treaty on the Functioning of the European Union (TFEU). This prohibits anti-competitive agreements and decisions by business associations that prevent, restrict or distort competition in the EU internal market.
Insurance Ireland is an association that members over 90 percent of the Irish motor insurance market. Its members include FBD, Aviva, Allianz, RSA, AIG, Liberty Insurance and Zurich.
The investigation into the organization began after a series of raids on insurers in mid-2017 by bodies including the Competition and Consumer Protection Commission.
Terms of contract
European Commission Executive Vice President Margrethe Vestager said: “Access to data is essential for insurers to assess the risk they are taking and to offer customers competitive terms and conditions.
“We are concerned that certain insurers and their agents have suffered a competitive disadvantage because Insurance Ireland has denied or delayed access to its data exchange system to compile valuable insurance claims information.
“This prevented new providers from entering the market competitively and thus reduced Irish drivers’ choice of car insurance at competitive prices,” she said.
“Non-discriminatory access to data-sharing systems is important to foster competition in data-based markets,” added Vestager.
The Commission’s first conclusions are contained in a statement of objections submitted to Insurance Ireland.
Opening a formal antitrust investigation and submitting a statement will not prejudice the outcome of the investigation, the commission said.
Insurance Ireland stressed that the Commission’s statement does not constitute a final decision in the investigation. She said she had worked with the Commission during the process and will continue to do so.
The organization said it was confident of addressing any concerns and would respond to the Commission’s statement in the coming weeks.