It’s the turn of the Australian Competition & Consumer Commission (ACCC) to outline preliminary competition concerns over the proposed union involving insurance broking giants Aon Plc and Willis Towers Watson (WTW), which are two of the world’s three largest brokerages.
Late last year, both the European Commission and New Zealand’s Commerce Commission released their respective preliminary issues surrounding the mammoth merger. Competition authorities in North America are also reviewing the deal.
Now the ACCC has published a 19-page “Statement of Issues,” inviting submissions on the document until March 12. The feedback will form part of the regulator’s final decision, which is slated to be announced on May 27.
In a release, ACCC Commissioner Stephen Ridgeway noted: “We are concerned that the combination of Aon and WTW will remove a significant competitive constraint from the markets for commercial risk broking to large customers or those with more complex and/or high-value insurance premiums; reinsurance broking; and employee benefits broking in Australia.”
It is feared the merger might result in price increases or reduced service levels for customers, while also potentially limiting the insurance coverage and pricing that smaller brokers are able to obtain.
As for the area of reinsurance, Ridgeway had this to say: “Reinsurance is vital for the Australian economy as it enables insurers to continue to write new insurance policies.
“The ACCC is concerned that the proposed merger will reduce insurers’ choice of reinsurance brokers in an already concentrated market.”
The statement of issues and submission procedure details are available on the ACCC website.