A finding that P&I clubs flouted anti-trust provisions would open up marine insurance market, say experts
The European Commission has launched a probe into whether the London market-based group of protection and indemnity (P&I) clubs, which provide cover for 93% of the world’s ocean-going shipping, infringes its competition rules.
The International Group (IG) of P&I clubs is an association of the 13 mutual, non-profit-making clubs that provide P&I marine insurance to their ship-owner members.
Under the framework of the IG, the 13 operate agreements on claim-sharing and joint reinsurance in the marine insurance sector.
The agreements are not automatically covered by the anti-trust block exemption rules for the insurance sector – which came into force in April – because the market share concerned is much greater than the 20%-25% ceilings provided for in the new rules.
The Commission said: “The aim of the procedure is to examine whether certain provisions of the agreements may lessen competition between P&I clubs, as well as restrict, to a certain extent, the access of commercial insurers and/or other mutual P&I insurers to the relevant markets.”
Responding to the EC’s announcement, the IG said it would co-operate with the investigation but in the meantime it would be business as usual for the group.
CMS Cameron McKenna competition team partner Susan Hankey said a Commission finding that the P&I clubs flouted anti-trust provisions could be good news for brokers if it opened up the marine insurance market.
“The commission last looked at IG a decade ago. In theory, the Commission could now find the arrangements anti-competitive and require a wholesale reorganisation of the way this class of business is provided.”