Could Bennetts sale be bad for UK bikers’ insurance costs?
● Insurance broker given just days to address concerns
The Competition and Markets Authority have completed the first stage of their investigation into insurance giant Ardonagh’s purchase of Bennetts and are concerned it “could lead to higher prices, less choice and worse services for motorcyclists in the UK”.
The Ardonagh Group Ltd, which already operates Carole Nash and Swinton, announced in February a £26 million deal to purchase Bennetts. The two are the largest motorcycle insurance brokers in the UK, so combining the pair, which would make them three times the size of their nearest competitor, has caused concern at the CMA.
The CMA investigation has found that Ardonagh and Bennetts are close competitors and a merged company would face limited competition from smaller brokers such as Bikesure or MCE. They also note that despite the increased use of price comparison websites, such as MCN Compare, the two make most of their sales direct and are less exposed to price competition. “Over one million motorcyclists
● ‘This could lead to a lack of competition’ COLIN RAFTERY, CMA DIRECTOR
in the UK rely on good value and high-quality insurance to keep them on the road and to provide an effective safety net when things go wrong,” says Colin Raftery, CMA Senior Director. “We’re concerned that Ardonagh buying up its most important competitor could lead to a lack of competition in the market, resulting in a worse deal for customers across the UK when they next come to renew their policies.” Responding to the announcement, Bennetts said: “Ardonagh now has the opportunity to propose an acceptable remedy, failing which the CMA will open an in-depth Phase 2 investigation, to review the transaction in more detail. In the meantime, Bennetts will continue to cooperate fully with the CMA, whilst operating independently from Ardonagh and its other motorcycle insurance brands.” Ardonagh and Bennetts now have five working days to offer any undertakings to address the CMA’s concerns. If they do not do so, the merger will be referred for an indepth Phase 2 investigation.