European Union antitrust regulators will investigate whether individual business insurers' use of long-term contracts and networks of exclusive agents breaks EU rules by restricting competition and pushing up prices.
Profit margins in Europe's €345 billion ($449 billion) business insurance market vary from country to country, providing evidence that lack of competition is inflating rates, the commission said in a preliminary report on January 24. The findings followed a probe that began 1 1/2 years ago into the insurance market. „We will now assess whether there is indeed foreclosure by working together with the national competition authorities,” Competition Commissioner Neelie Kroes said today in a speech before insurance company representatives in Brussels. „Should this prove to be the case, any problems will be tackled through antitrust enforcement measures, either at national or community level.” The EU agency has the power to fine companies as much as 10% of worldwide sales for antitrust violations. The insurance probe is part of a series of investigations by Kroes into financial services including retail banking and payment cards. The commission will issue a final report on insurance in September. (Bloomberg)