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Peel Hunt: Moneysupermarket.com (Hold) - Competition Commission provisional findings




Peel Hunt


17 Dec 2013





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Moneysupermarket.com (Hold) Competition Commission provisional findings The Competition Commission (CC) has issued its provisional conclusion for the private motor insurance market. The CC has come out in favour of use of narrow ‘most favoured nation’ (MFN) clauses and against wide MFN clauses. Narrow clauses require the insurer not to offer better rates on its own website; wide clauses prevent a better offer on any other outlet. The CC favours narrow clauses as they allow PCWs to operate and, incidentally, PCWs are seen as positive for a competitive market (a useful reference for the FCA review). Wide clauses act to limit price competition, and also limit competition on commission rates (a cost element for insurance), both to the detriment of the consumer. MONY does not use wide MFN clauses, unlike a couple of its competitors. In levelling the playing field, this move would increase the range of suppliers (at the margin) to MONY; these in the past have been constrained by other PCWs’ wide clause use. So a small positive for MONY and a useful supportive comment from the CC ahead of the FCA review. Malcolm.Morgan@peelhunt.com

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