OFT waters down data-sharing package

The OFT has watered down an element of its package to discourage motor insurers from sharing pricing data.

Last November, seven of the UK’s biggest insurance companies agreed to limit the data that they exchange following after the OFT raised competition law concerns about the practice.

Ageas, Aviva, AXA, Liverpool Victoria, RBS Insurance Group, RSA and Zurich have all offered formal commitments to the consumer watchdog in the wake of an OFT investigation which identified an increased risk of price coordination among motor insurers using Experian’s specialist market analysis tool Whatif? Private Motor.

But the OFT has announced today that it has agreed to amend the package of commitments by cutting the age of the data that can be exchanged via the tool from 36 to 6 months.

The OFT believes this less restrictive time period will ensure that a certain level of information remains available to potential entrants , in particular small competitors, thus encouraging healthy competition in this motor insurance market.

However, the OFT has stuck to the view that the rest of the package offered by insurers is necessary to remove its competition concerns.

These include the requirements that pricing information must be anonymised and aggregated across at least five insurers; and that it should not be supplied to insurers until prices are already ‘live’ in policies sold by brokers.