The ACCC has preliminary competition concerns with
Aon and WTW are two of the three largest providers of commercial risk, reinsurance and employee benefits broking and advisory services globally, including in
The ACCC is concerned that the proposed merger will significantly lessen competition in the supply of these services in
"We are concerned that the combination of Aon and WTW will remove a significant competitive constraint from the markets for commercial risk broking to large customers or those with more complex and/or high-value insurance premiums; reinsurance broking; and employee benefits broking in
The proposed merger may lead to price increases or reduced service levels for large, complex or high-value commercial insurance customers. It may also limit the insurance coverage and pricing smaller brokers are able to obtain for their customers.
The ACCC is considering whether the effects of the proposed merger are especially pronounced in certain commercial insurance risk classes or industry specialities such as financial and professional, cyber, marine insurance and insurance for construction projects.
The ACCC is also concerned about the impact of the proposed merger on the supply of reinsurance broking and advisory services particularly for the supply of reinsurance which covers all current and future policies written by the primary insurer for particular risks.
"Reinsurance is vital for the Australian economy as it enables insurers to continue to write new insurance policies. The ACCC is concerned that the proposed merger will reduce insurers' choice of reinsurance brokers in an already concentrated market. This could lead to price increases or reduced service levels for customers, including the ability to access sufficient reinsurance capacity,"
The ACCC is also concerned that the proposed merger will reduce the three major providers of employee benefits broking and consultancy services in
The proposed merger may also increase the risk of coordinated effects in the markets where Aon and WTW compete. "Reducing the number of brokers in these already concentrated markets, increases the potential for the remaining brokers to align their pricing and strategies,"
The ACCC has published a statement of issues and is seeking further information. Feedback on the statement of issues is due by
Background
Aon and WTW are both global professional services firms that provide, globally and in
Aon employs approximately 50,000 employees and conducts operations in more than 120 countries. In
WTW has more than 45,000 employees and services clients in over 140 countries. It has five branches in
The proposed merger is being reviewed by competition authorities in other jurisdictions including
Use this form to make a general enquiry. Media enquiries: Media Team - 1300 138 917, media@accc.gov.au
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(C) 2021 M2 COMMUNICATIONS, source