Consumers worried about competition impact
Consumer groups are worried that a merger of IAG and QBE will increase rates and reduce competition.
A merger between the two insurers would leave just QBE/IAG and Suncorp dominating the market with 76% in personal lines and 41% in commercial lines.
Choice spokesman Christopher Zinn says the association is concerned about whether there will still be sufficient competition in the market.
“There is doubtless concern in the market that too much concentration will generate upward rates, which we are keen to avoid,” Mr Zinn told insuranceNEWS.com.au.
“I am sure [IAG and QBE] will make lots of promises that competition will be enhanced. We always like the regulators to make sure that is actually the case.”
He says he is certain the Australian Competition and Consumer Commission (ACCC) will be looking closely at any prospective merger, with the over-arching Trade Practices Act there to help protect consumers if any problems arise.
Council of Small Business Organisations of Australia CEO Tony Steven says the problem with mergers between large companies is that it lessens competition in the marketplace.
“Small businesses that use their services often find themselves with increased costs,” Mr Steven said. “There needs to be quite a number of players in the marketplace to maintain integrity.”
A merger between the two insurers would leave just QBE/IAG and Suncorp dominating the market with 76% in personal lines and 41% in commercial lines.
Choice spokesman Christopher Zinn says the association is concerned about whether there will still be sufficient competition in the market.
“There is doubtless concern in the market that too much concentration will generate upward rates, which we are keen to avoid,” Mr Zinn told insuranceNEWS.com.au.
“I am sure [IAG and QBE] will make lots of promises that competition will be enhanced. We always like the regulators to make sure that is actually the case.”
He says he is certain the Australian Competition and Consumer Commission (ACCC) will be looking closely at any prospective merger, with the over-arching Trade Practices Act there to help protect consumers if any problems arise.
Council of Small Business Organisations of Australia CEO Tony Steven says the problem with mergers between large companies is that it lessens competition in the marketplace.
“Small businesses that use their services often find themselves with increased costs,” Mr Steven said. “There needs to be quite a number of players in the marketplace to maintain integrity.”