Seven major insurance companies have agreed to limit sharing product and pricing data over Office of Fair Trading concerns about price fixing.
The companies and their software providers have promised to limit the use of business data that the OFT feared could be used to compare prices against the interests of customers.
The OFT launched an investigation in to the competition between companies mainly offering car insurance last year.
Insurers Ageas, Aviva, AXA, Liverpool Victoria, Royal Bank of Scotland Insurance, Royal Sun Alliance and Zurich with software service providers Experian and SSP have agreed they will change the way they share information as a result of the inquiry.
And The Insurance Blogger has been tipped-off that more insurers and more software firms are expected to sign up to the agreement.
The OFT looked at software tools that let insurers look at pricing information offered by rival firms and brokers.
In theory, the OFT discovered the tools could replicate ‘live’ insurance quotes and policy prices offered by one company so that another firm could set prices to their advantage. No charges of this anti-competition practise were made against any insurer or software firm by the OFT.
The new information sharing agreement lets companies swap data, but pricing information will be anonymous and aggregated across at least five insurers and already ‘live’ in broker-sold policies.
Clive Maxwell, Executive Director at the OFT said: “Active competition between firms drives better value for consumers and growth for the economy, and anything that potentially dampens that is a cause for concern. The OFT treats possible breaches of competition law very seriously, but we believe that formal commitments in this case would be a proportionate way of resolving our concerns.
“We used our discretion to limit our investigation’s scope in order to reach a quick and effective outcome. However, we are aware that similar market analysis tools exist both in motor and other insurance markets and we urge companies using them to ensure that they are complying with competition law.”