Clampdown on car insurance price 'cartel'

  peter99co 14:58 14 Jan 11
Locked

click here

The Royal Sun Alliance blew the whistle on what was going on and so won immunity from any prosecution which might have resulted.

How nice of them.

  WhiteTruckMan 17:19 14 Jan 11

might do better if they stopped treating their prize customers (like me) with complete contempt. I'm the kind of driver they should be falling over themselves to get & keep. Never had an own fault accident, just keep paying the premiums year after year, a veritable cash cow. Yet when it comes to renewal time they consistantly quote stupidly high renewal figures. I know they are high because when I get an online quote from the same company as a new customer the numbers are a lot lower.

I show as much loyalty to insurance companies as they do to me - zero!

Only rich people and mugs blindly accept renewal quotes.

WTM

  OTT_B 18:01 14 Jan 11

Add mobile phone contracts can be added into the mix.
You have to actively change contract (and company sometimes) or you end up paying the noise.

  Strawballs 18:52 14 Jan 11

I canceled my AA cover and after the 3rd reminder letter I got one saying "have you forgot your renewal well let us give you a 25% reduction as a reminder" had they they done that from the word go they might not have lost a customer" Like WTM with his insurance I have been paying year in year out without using the service.

  OTT_B 18:59 14 Jan 11

Too many typos in my last post to be worth correcting!

I'd like to know exactly what this Experian software did, and where it got its information from.
I'm not a fan of Experian in the slightest and I suspect this may put another nail in the coffin lid.

  peter99co 19:55 14 Jan 11

The Experian software allowed insurers to access not only the pricing information they themselves provided to brokers but also the premiums supplied by their competitors.

In theory, this allowed insurers to tie their charges to those of rivals, so limiting competition and keeping premiums artificially high.

The insurance firms and their partners, including Experian, have all agreed to sign a legal undertaking, which will be policed by the OFT, to prevent such detailed information sharing in future.

The official customer body, Consumer Focus, welcomed the OFT move and called for the crackdown to go further.

  JYPX 19:59 14 Jan 11

On that specific point - It was funny to hear a director of Direct Line trying to defend himself on Five Live's consumer programme yesterday.
click here
That's Martin Lewis laughing at him at 13:10 and then putting hin on the spot at 16:15.

  peter99co 20:01 14 Jan 11

Insurers Ageas Insurance Limited (formally Fortis Insurance Limited), Aviva plc, AXA Insurance UK plc, Liverpool Victoria Friendly Society, RBS Insurance Group Limited, Royal Sun Alliance and Zurich Insurance plc, and the IT software and service providers Experian Limited and SSP Limited have all offered formal commitments to the OFT. This follows an OFT investigation which identified an increased risk of price coordination among motor insurers using a specialist market analysis tool by Experian called Whatif? Private Motor.

The OFT limited the scope of its investigation to a small number of parties with a view to achieving a swift and effective outcome. However, the investigation potentially has wider implications as the Experian tool is just one of a number of similar products used throughout the insurance industry.

The tool allowed insurers to access not only the pricing information they themselves provided to brokers but also pricing information supplied by other competing insurers. The OFT warned the firms that the information exchanged through WhatIf? Private Motor raised competition law concerns because:

* the analysis tool enabled insurers to access individualised and highly disaggregated pricing data for vast numbers of permutations of customer risks across most competing private motor insurers that sold through brokers
* the information accessible through the analysis tool was not genuinely public information. While it would, in theory, be possible to replicate the information by obtaining individual quotes from insurers, this would be almost impossible in practice as it would require obtaining hundreds of thousands of individual quotes
* insurers were able to access information about their competitors' future pricing intentions as the tool was received by insurers in advance of the pricing information going 'live' in insurance policies sold by brokers, and
* the analysis tool was updated and provided to subscribing insurers on a frequent and regular (monthly) basis.

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