European Commission takes over aviation broking probePosted On: Oct. 27, 2017 1:20 PM CST
The European Commission said Friday that is has taken over the probe begun by British authorities of several top insurance brokers for allegedly sharing competitively sensitive information within the aviation and insurance sectors.
“The Commission confirms that it has formally taken over the investigation of possible anticompetitive practices in the aviation and aerospace insurance and reinsurance broking products. We cannot prejudge its outcome,” an EU spokeswoman said in a statement.
News of the investigation first surfaced in April when Jardine Lloyd Thompson Group P.L.C., UIB Group, Marsh Ltd., Aon P.L.C. and Willis Ltd., the U.K. brokerage subsidiary of Willis Towers Watson P.L.C., all issued statements saying they were under investigation by the U.K.’s Financial Conduct Authority and were cooperating.
At least three of the firms confirmed that they were now being investigated by the European Commission and that the FCA probe was over.
Willis Towers Watson on Thursday issued a statement saying that the European Commission “disclosed to us that it has initiated investigation proceedings in respect of a suspected infringement of EU competition rules involving several broking firms, including our principal U.K. broking subsidiary and one of its parent entities.”
In particular, the statement continued, “The Commission has stated that the proceedings concern the exchange of commercially sensitive information between competitors in relation to aviation and aerospace insurance and reinsurance broking products and services in the European Economic Area, as well as possible coordination between competitors.”
Willis Towers Watson also said the FCA had informed the company that it had closed its investigation, but “retains its jurisdiction over broking regulatory matters arising from the conduct being investigated.”
“Given the status of the investigation,” the statement continued, “the company is currently unable to assess the terms on which this investigation, or any other regulatory matter emanating from the conduct being investigated, will be resolved.”
Dan Glaser, president and CEO of Marsh & McLennan Cos. Inc., also acknowledged the EU’s takeover of the case during Thursday’s third-quarter conference call.
“In early October,” Mr. Glaser said, “we received a notice from the competition authorities in Brussels that the European Commission has commenced a civil investigation of a number of insurance brokers, including Marsh, regarding the aviation insurance and reinsurance sector. In light of the actions taken by the European Commission, the FCA informed us at the same time that it has discontinued its aviation investigation of the U.K. competition law.”
A spokeswoman for JLT confirmed the investigation on Friday, saying in an email that the company “notes the recent European Commission’s initiation of an investigation into the aviation insurance sector following the FCA’s discontinuation of its investigation.”
“The Company is participating in this investigation,” the statement continues, “and confirms that JLT Specialty will continue to provide all appropriate assistance to the EC. We are unable to comment on the ongoing investigation beyond saying that JLT takes all regulatory matters very seriously and has a constructive relationship with all the regulators that it works with across the JLT Group.”
UIB Group and Aon did not respond to requests for comment.