Brazilian regulator probes aviation (re)insurance market

The Brazilian competition regulator has launched an investigation into 11 aviation insurers and insurance intermediaries operating in the country.

In a statement, Brazil’s Cade antitrust agency named AIG, Amlin, Aon UK Limited, Aspen Insurance UK, JLT Specialty Limited, Liberty Global Group, Marsh Limited, Tokio Marine Kiln Group Limited, United Insurance Brokers Limited, XL Group plc and Willis Group Limited as the entities under investigation.

The inquiry will also target 30 individuals linked to those companies.

According to investigation documents issued by the government agency, the probe will focus on the sharing of commercially sensitive information in the (re)insurance market for aviation, aerospace and related services.

Cade plans to target alleged anticompetitive conduct that started abroad and potentially affected the Brazilian market.

The alleged sharing of sensitive information occurred in two phases: at the beginning of the 1980s and from 1997 through to April 2017, the watchdog noted.

“The information involves recent and detailed data from competitors on pricing and contracting conditions relating to aviation and were exchanged through aerospace insurance and reinsurance by fax, email, telephone and at bilateral and multilateral meetings,” Cade said.

If found to have engaged in anticompetitive practices, the companies could face fines equivalent to up to 20 percent of their gross annual revenue in 2018, according to the agency.

In a statement to The Insurance Insider, Tokio Marine Kiln said it was aware that CADE had opened the investigation.

"At this stage TMK only has access to the public version of a "Technical Note" from CADE," Tokio Marine Kiln said.

"According to that document, the investigation involves eleven companies and a number of individuals. We understand that CADE is in the process of serving more detailed information on those companies and individuals.

"TMK is fully committed to compliance with all applicable competition laws. It will consider carefully the details of any allegations by CADE when it receives these.  In the meantime, it is not in a position to comment further," the insurer added.

A spokesperson for Aon said: “Aon is aware of this matter and will work with the Brazilian Administrative Council for Economic Defense to ensure they can carry out their work as efficiently as possible.”

A Marsh spokesperson also commented: “Marsh will co-operate with any inquiry by the authorities.”

A spokesperson from Willis Towers Watson said: "In January 2019, the Brazil Conselho Administrativo de Defesa Economica (“CADE”) launched an administrative proceeding to investigate alleged sharing of competitive and commercially sensitive information. To our knowledge, the focus of the investigation is limited to aviation and aerospace broking activities outside Brazil. As this is an ongoing investigation, we cannot comment further at this time.”

Amlin, JLT Specialty, Liberty Global, United Insurance Brokers and XL Group did not immediately respond.

AIG, Aspen and MS Amlin declined to comment.

The scope of the investigation emulates a UK aviation insurance market probe in 2017, which was first revealed by The Insurance Insider.

In April 2017, the Financial Conduct Authority launched a series of dawn raids on brokers Marsh, Aon, JLT, WTW and UIB as part of a crackdown on the alleged misuse of confidential client information.

The brokers were revealed to be under investigation for sharing competitively sensitive information within the aviation (re)insurance sector.

In October 2017 the European Commission took over the investigation from the UK regulator.

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