Admiral, Esure Drop as Regulator Seeks to Cut Car-Insurance Cost
Admiral Group Plc (ADM) and Esure Group Plc (ESUR) fell in London after the U.K.’s Competition Commission said it’s seeking to reduce policy costs for Britain’s 11 billion-pound ($18 billion) motor-insurance industry.
Admiral, owner of the confused.com price comparison website, fell 2.5 percent to 1,229 pence at 3:53 p.m. in London, while Esure dropped 3.7 percent to 237.80 pence. Shares of Direct Line Insurance Group Plc (DLG) and Aviva Plc (AV/), which also provide auto insurance, were little changed.
The regulator found in a preliminary report published today that a “complex chain” to settle claims had increased the cost of replacement cars and repairs for motorists, boosting premiums by as much as 200 million pounds a year.
“We are now considering a range of possible measures, some of them far-reaching reforms, to ensure that the market better serves the interests of customers,” said Alasdair Smith, deputy chairman of the commission in a statement. Smith is leading the investigation into the private-motor insurance.
The commission also cited issues with the way insurers sold add-on products as well as contracts between price comparison websites and insurers, which could mean that individual premiums were not offered more cheaply elsewhere.
Esure owns 50 percent of the Gocompare.com website.
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