Latest news from the world of breakdown cover UK firms is that Watchdogs for the industry have now outlawed a practise which had previously allowed insurance companies to access information on each other’s premiums, a process which had the potential to lead to higher prices for drivers.

A variety of leading motor insurance firms had been trading the information amongst themselves, utilising software that was created by the renowned credit rating agency Experian.  It meant that firms could tie their premium prices in roughly the same area as their competitors, keeping prices across the board artificially high and removing any sense of genuine competition.

Now, though, the Office of Fair Traiding (the OFT) will police a legal undertaking to be signed by all the offending companies – which include RSA, RBS, Aviva and AXA – which will prevent any such information sharing in the future.

The move has been welcomed by Consumer Focus, the official consumer body, who have requested that the crackdown actually go further.  The policy expert, Ruper Roker, noted that it hoped that the OFT would consequently ‘apply the same approach to other forms of insurance, and extend it to all analysis tools used by the industry to ensure the customers aren’t losing out.’

The Executive Director of the OFT, Clive Maxwell, said that ‘Active Competition between firms drives better value for consumers and growth for the economy, and anything that potentially dampens that is a cause for concern.’  Mr Maxwell also added that the OFT ‘treats possible breaches of competition law very seriously.’

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