Thorough probe launched into auto insurance market

TIRANA, June 5 – Albania’s Competition Authority says it has launched a thorough investigation into the nine insurance companies operating in Albania after observing signs of alleged price-fixing in the compulsory auto insurance policies.
In February 2014, compulsory motor insurance policies, known as Motor Third Party Liability (MTPL) and accounting for around 40 percent of the insurance market rose by 6,000 lek (Euro 42) to an average of 20,000 to 21,000 lek (Euro 140 to 147) by all nine companies operating on the market including state-owned INSIG insurer. Compared to the same period last year when they traded at 5,500 to 6,000 lek, motor insurance rates have more than trebled. However, all insurance companies were forced to reduce prices last February in order to maintain their market shares after state-owned INSIG was forced by government to cut rates by around 20 percent to 16,000 lek (Euro 112).
Fueled by a sharp rise in compulsory motor insurance rates, the insurance market registered a 26 percent growth rate in the first four months of this year.
In October 2012, eight insurance companies operating in Albania were fined a total of 89 million lek (Euro 625,000) after the Competition Authority uncovered a price-fixing deal in compulsory motor insurance policy. The deal was made in February 2012 when all companies fixed motor insurance prices in a banned agreement severely damaging competition.