AGCM

PRESS RELEASE

AUTOMOBILE LIABILITY INSURANCE: ANTITRUST AUTHORITY LAUNCHES FACT-FINDING INVESTIGATION, PRICES RISE DESPITE REFORMS

The study seeks to identify the corrective measures needed to give a competitive push to the sector.  Statistical data reveal significant price increases from 2009 to 2010

In a meeting on May 6th, 2010, the Autorità Garante della Concorrenza e del Mercato decided to launch a fact-finding investigation into the automobile liability insurance sector. The investigation sets out to discover why prices continue to show significant and widespread increases in spite of the numerous legislative and regulatory interventions that have been introduced over the last five years to intensify competition in the sector.
The analysis will aim to reconstruct price and cost fluctuations in the sector, with a special focus on direct compensation.  While this new procedure has been in place for three years now, the projected cost reductions and consumer benefits have yet to be observed. We need to determine whether the reform as it was actually applied generated the needed competitive push or, alternatively, whether corrective measures will be required for pro-competition effects to manifest themselves in full.  
The investigation will focus on insurance companies and the cost control policies they use to calculate compensations, the commercial policies being used to restructure customer portfolios, the geographical areas covered, the types of vehicles insured and the risks assumed, all in terms of their impact on demand and the competitive nature of supply. Automobile Liability Insurance is one of the insurance sector's biggest markets - premium collections exceeded 17 billion euros in 2009, accounting for 46.3% of all accident insurance and 14.4% of overall portfolios. In the year 2007, according to ISTAT data, the average family spent 940 euros, equivalent to 1.2% of GDP, to insure private means of transportation.

Rome - May 17, 2010