How will the Competition Commission's probe affect the industry?

Yesterday, the Competition Commission announced the direction of its probe into the UK motor insurance market, but what will the effect on the insurance sector be?

Standard & Poor’s has already predicted that the insurance industry will be mostly unscathed, suffering reputational rather than financial damage.

The Motor Accident Solicitors Society (MASS) has pointed out that the commission’s review will dumbfound the insurance industry, partly owing to the Jackson reforms, which the Ministry of Justice will implement in April.

The commission has certainly not done the insurance sector any favours by setting a tight deadline to submit evidence: January next year.

Beyond this, the commission’s review promises to cover some interesting sectors. The body has stated that it will look into aggregators’ power and aggregators’ effect on consumers, as well as other issues such as drip-in pricing.

The commission certainly has the clout to back up its probing. It can ban sharp practices and ask the government to legislate.

The outcome of the review is still uncertain, but all eyes will be on the Competition Commission next September, when it publishes its interim findings. Let’s hope the damage is mainly reputational.