The below Parliamentary question was asked by Rob Marris on 2016-06-14.
To ask Mr Chancellor of the Exchequer, with reference to the Answer of 18 January 2016 to Question 20373, what criteria he has used to assess the level of competitiveness in the motor insurance market.
The Government is committed to ensuring that insurance markets operate on the basis of fair and open competition.
The Government has established the Competition and Markets Authority (CMA) to promote competition for the benefit of consumers and investigates any issues that may arise in this respect, including in insurance markets.
In 2014, the CMA investigated the competitiveness of the UK private motor insurance. It found evidence that there was strong price competition for motor insurance sold via price comparison websites (PCWs), which are responsible for over half of insurers’ new motor insurance business, and that PCWs had increased competition between private motor insurance providers overall.
Prudential Regulation Authority (PRA) data on “net combined ratios” of motor insurers provides further indication that there is strong competition in the private motor insurance market.
The Department for Business, Innovation & Skills also found that the private motor insurance has high switching rates compared to other markets, providing another indicator of strong competition.