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Private motor insurance

Start date: 15 September 2011

Completion date: 28 September 2012

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Summary of work

The OFT provisionally decided to refer the market to the Competition Commission (CC) in May 2012 after a market study gave reasonable grounds for suspecting that there are features of the market that prevent, restrict or distort competition.

The OFT's market study focused on the provision of replacement vehicles and vehicle repairs and considered that the insurers of drivers responsible for an accident ('at-fault' drivers) appear to have little control over the way repairs and replacement vehicles are provided to the 'not-at-fault' driver. This may enable the insurers of not-at-fault drivers, and others such as insurance brokers, credit hire organisations and repairers, to engage in practices which appear to result in the cost of replacement vehicles and vehicle repairs provided to not-at-fault drivers being higher than they might otherwise be.

Having considered the responses submitted during a public consultation process, the OFT continues to hold the view that there are reasonable grounds for suspecting that there are features of the market that prevent, restrict or distort competition, and has decided that a more in-depth investigation by the CC through a market investigation reference is appropriate.

The CC has up to two years to report its findings. If it finds that features of a market are harming competition, it has powers to impose remedies to address the situation.

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The OFT has referred the market for private motor insurance and related goods or services to the Competition Commission for investigation, under section 131 of the Enterprise Act 2002.

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Related documents

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Team leader: Tarnya Wilkins (020 7211 8154

Project director: Claire Hart (020 7211 8782

Senior responsible officer: Claire Hart (020 7211 8782

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