Investigation into the use of Glassmatix system by insurance companies

August 1, 2003

Outcome of investigation

The Competition Authority (“the Authority”) opened an investigation into the manner in which Allianz Ireland plc, Axa Insurance Limited, Hibernian General Insurance Limited and Royal & Sun Alliance Insurance plc implemented the Glassmatix vehicle repair estimation system. Subsequently, the Authority secured agreement from the four companies to address competition concerns.

Outline of the case

The Glassmatix system is an internationally recognised vehicle repair estimation system, which provides labour times for repairs based on recognised best practice and up to date prices for manufacturer parts. The Glassmatix system is designed to replace opinion time based methods. Allianz Ireland plc, Axa Insurance Limited, Hibernian General Insurance Limited and Royal & Sun Alliance Insurance plc formed a Consortium to introduce the Glassmatix system into Ireland.

Following a complaint received in November 2001, the Authority was concerned that the Consortium may have used the implementation of the Glassmatix system as a means to fix the price of motor vehicle repair costs and thereby restrict competition in the market for motor vehicle repairs. In the opinion of the Competition Authority, any such coordination with respect to costs, if it were established, would also promote conditions conducive to collusion in setting motor vehicle insurance premiums. The four insurers involved in the Consortium account for between 65-70% of the Irish motor vehicle insurance market.

In summary, the agreement reached between the Competition Authority and the Consortium, addresses the Authority’s competition concerns while promoting the potential benefits to consumers of the Glassmatix system. These potential benefits include cost reduction and improvement in the time taken to complete motor vehicle repairs compared to opinion time based methods. These cost savings, if passed on to the consumer, have the potential to lower insurance premiums.

At the same time, the Consortium members have agreed to refrain from conduct that could prevent the realisation of these benefits to the consumer. Such conduct, if it were to occur, would dampen competition to the detriment of the consumer in the relevant markets covered by the Glassmatix system. The Competition Authority for its part accepts that if the insurance companies comply with the undertakings then the Authority will refrain from instituting legal proceedings. Each of the four Insurance companies specifically denies breaching the Competition Act, 2002.

To learn more, read the Enforcement Decision.

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