Think piece: Market pricing information and competition


carsUK motor insurance companies have been using detailed market pricing information to help set insurance rates for many years. Insurers have been able to check how much their competitors have been quoting for different types of vehicles and different groups of drivers. Available information has been very precise and has allowed predicting prices for individual quotes and up to one month ahead.

The Office of Fair Trading (OFT) is claiming that using such market information limits competition. OFT is threatening the largest UK insurers with a continued investigation to make them commit to restricting the use of market pricing information. This commitment will be applicable to all UK insurers, including smaller ones who are not signatories.

There is no valid economic case for restricting access to market pricing information. As a consequence the commitments offered, or any other regulatory action, will not be addressing an identifiable competition concern.

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