Bennetts insurance sale to be reversed following CMA concerns

THE sale of Bennetts motorcycle insurance to the Ardonagh Group has been reversed by the Competition and Markets Authority (CMA).

The sale was completed in August 2020, with Ardonagh paying £26m for the specialist motorcycle insurance broker from Peterborough.

We first reported on the CMA’s concerns after it begun an initial Phase 1 investigation that found that the merger could leave UK motorcycle insurance customers worse off.

Had the move gone ahead, Ardonagh, which already owns Carole Nash and Swinton, will be by far the biggest insurance supplier in the UK, owning three of the largest motorcycle insurers. The sale would make the group three times larger than its next competitor.

With many consumers turning to price comparison websites to buy insurance, Bennetts, and the Ardonagh Group both have a high proportion of returning customers coming directly to their door. Bucking the trend for such demand on this type of website. This nullifies the advantage some smaller companies might hold over the two firms, as smaller brokers and insurers won’t gain any benefit by aiming for lower premium policies.

In order to address these concerns, Ardonagh has now offered to sell Bennetts - effectively reversing the deal completely.

The CMA has accepted that this offer should, in principle, be capable of remedying the competition concerns it has identified and will now consider the detailed aspects of the proposed remedy. If the proposed remedy is accepted, Ardonagh would have a fixed period of time to sell Bennetts to a purchaser approved by the CMA.

The CMA has an initial deadline of 25 November 2020 to take its final decision on whether to accept the proposed remedy and will consult publicly on the detailed aspects of the offer in the coming weeks.