Namibia: Insurers probed for gouging ‘panel beaters’

The Namibian Competition Commission has launched an investigation into short-term insurers, after findings show that various short-term insurance companies have engaged in collusive conduct—specifically price fixing—in contravention of the Competition Act by setting maximum mark-up rates that auto repair shops—known locally as panel beaters—should charge for repairs to insured vehicles.

The Commission’s preliminary investigative findings show that insurance companies have set the maximum rates and mark-up in order to reduce their cost without having regard to panel beaters input cost. In doing so, insurance companies unjustly influence the price rather than allowing competition to determine the prevailing market conditions.

The Commission’s investigations found that on top of setting maximum mark-ups on parts, these insurance companies further impose maximum labor rates to be charged by panel beaters for the rendering of their services. Labor rates refer to the costs per hour charged by panel beaters for the repair of vehicles, while mark-up rates refer to the margins that panel beaters add on top of the costs of vehicle parts.

Full Content: The Villager