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The Competition Commission has revealed it raided the offices of long-term insurance providers in South Africa and found evidence that suggests the companies have been working with each other to fix prices.
The commission said it conducted operations at Sanlam, Old Mutual, Hollard, Momentum, Discovery, PPS, BrightRock and Bidvest Life.
The raids took place on 25 August 2022, in Gauteng, KwaZulu-Natal and the Western Cape.
It added that it collected physical and electronic evidence from the eight companies.
Although its offices weren’t raided, Liberty is also reportedly involved in the price fixing.
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“The commission obtained information that indicates that long-term insurers have been sharing price information, which they allegedly use to price and adjust prices of their respective existing and new long-term insurance products,” the Competition Commission said.
The information allegedly shared by the companies includes their premium rates for insurance products and fees for investment products.
They also allegedly shared information about each other’s products, affecting the design and reviews of each company’s products.
“The investment and risk related insurance products that are affected are retirement annuity and life insurance cover such as dread disease cover/chronic medical condition cover, disability cover, life cover and funeral assistance benefits,” it said.
The Competition Commission said the sharing of this information allows the insurance companies to adjust the prices of their premiums, if needed, and to align their prices of new products after comparing it to the prices of their competitors.
“For example, both product price and technical information may be considered in the design and review of products, such that product features and pricing is altered to achieve alignment with competitors.”
The Competition Commission said this coordination amounts to price fixing.
The investigation into the eight companies is ongoing, it said.
Although the evidence has not been released to the public, News24 is reporting that it includes emails between employees and that the price fixing has been taking place “since at least 1989”.
“The commission has information that the conduct has been ongoing since at least 1989. The information at the disposal of the commission indicates that the following respondents have participated in the conduct of sharing information pertaining to price with the view of adjusting their prices accordingly,” read the commission’s affidavit filed in the Western Cape High Court.
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