Information Exchange in the Italian Insurance Market in the Framework of the EU BER

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Alessandra Tonazzi, May 27, 2008

It is generally recognized that information sharing can produce pro-competitive effects in markets characterized by information asymmetries, by reducing uncertainty and competitive risks. When, as it is the case in the insurance market, firms do not know their customers characteristics, it can be beneficial to collect and pool information about customers with other firms in order to achieve a better assessment of risks. The availability of this information (that can only be made available in an aggregate way) can increase market efficiency, lower premiums, and assure better quality of services. Indeed the Commission, in 1992, adopted a Block Exemption Regulation (Regulation 3932/92) which was replaced, in 2003, with Regulation 358/2003 to make certain agreements exempt. The adoption of the BER does not imply, however, that all agreements on information exchange in the insurance sector are pro-competitive and both the Commission and national competition authorities might intervene when cooperation among firms exceeds the boundaries established in the BER. In Italy, for example, the Italian Competition Authority has dealt with several information exchange cases in the insurance sector.

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