The Competition and Markets Authority is concerned that the merger may lead to higher prices or a reduction in choice or quality
The Competition and Markets Authority (CMA) has referred Xchanging’s acquisition of insurance software company Agencyport Europe for a Phase Two review.
Xchanging completed the acquisition of Agencyport in July 2014 but the initial investigation by the CMA found that the merger may lead to higher prices or a reduction in choice or quality for Lloyd’s registered managing agents.
CMA senior director of mergers and decision maker in this case Sheldon Mills said: “Policy administration systems are critical, core software products for managing agents active in the Lloyd’s market. Insurers assist companies and/or individuals to manage risks and face an increasing number of regulatory requirements which is likely to increase their reliance and use of software solutions.
“The loss of competition between the 4 major suppliers could lead to higher prices or reductions in product quality or innovation. A detailed assessment will seek to ensure that the merger does not lead to detriment to insurers and ultimately consumers and businesses in the UK.”
Xchanging chief executive Ken Lever said: “This news is both surprising and disappointing. We will continue to work with the CMA to help them with their review process.”
The review is expected to take a further 24 weeks.