Major motor insurers have provisionally agreed to limit the information they swap about their pricing strategies.
The Office of Fair Trading (OFT) has forced seven insurers to restrict their use of a computer system that allows them to compare details of their quotes . The OFT is worried this may have undermined competition among insurers, potentially leading to drivers paying higher premiums. This would have been a breach of the UK’s competition laws. An OFT spokesman said: “Being able to view competitors’ pricing strategies could potentially have led to the risk of price co-ordination, putting upward pressure on car insurance premiums.”
The computer software at issue is called “WhatIf? Private Motor” and is supplied to insurers by Experian . It assembles details of the quotes that insurers provide to brokers and lets them analyse the price and risk that they, and their rivals, attach to the different elements of an insurance quote .
According to the OFT, 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.