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MUNICIPALITY OF MILAN'S INSURANCE COVERAGE (Start of investigation)


PRESS RELEASE



The Italian Competition Authority has initiated a proceeding against Assitalia, Fata, Generali, Ras, Lloyd Adriatico, Allianz Pace, Unipol, Fondiaria, Milano, Previdente, Toro, Augusta, Reale Mutua, Sai, Maa, Zurigo, Cattolica, Axa, Sara, Abeille and Intercontinentale to investigate an alleged violation of Section 2 (restrictive agreements) of Law no. 287/90.

The investigation, that is to be concluded within 210 days, is aimed at ascertaining the existence of an agreement among the main insurance companies, aimed at reducing competition with regards to tenders organized by public administrations, in the undertaking and renewal of insurance contracts for big clients.

The proceeding originated from a complaint filed with the Authority last January by the Municipality of Milan. The complaint arose from the unsuccessful tenders organized by the Municipality to contract the insurance coverage for a number of areas. As such, the Municipality alleged the existence of anticompetitive behaviour undertaken by the insurance companies which were invited to participate in the tender.

Following the boycott of two public tenders and of a third unofficial tender, the Municipality proceeded to negotiate privately the insurance service with Assitalia, who was the only one, among the companies invited to participate in the tenders, that made a bid together with Generali, Ras, Unipol and Finanziaria.

On the basis of the information filed by the Municipality of Milan, the Authority deems that the insurance companies' decision to boycott the tender does not derive from autonomous business choices, but from a concerted conduct. As such, in the course of the investigation, it is to be ascertained whether this conduct falls within a wider agreement aimed at coordinating the policies for the undertaking of "industrial" risks (companies and public administrations).

The relevant markets have been defined in relations to the single areas of coverage required by the Municipality of Milan.

In each one of these, the parties involved in the proceeding hold altogether a market share of over 60%.