LONDON (Reuters) - Britain’s financial watchdog is investigating five insurance brokers over information-sharing on aviation insurance, the companies said, in one of the first cases of its kind by the watchdog.
Aon (AON.N), Jardine Lloyd Thompson (JLT) (JLT.L), Marsh (MMC.N), UIB and Willis Towers Watson (WLTW.O) issued statements saying they were cooperating with the Financial Conduct Authority’s investigation, with Willis and Marsh adding the probe followed recent visits by the FCA to their offices.
“The FCA indicated that it had reasonable grounds for suspecting that Marsh Limited and others have been sharing competitively sensitive information within the aviation (re)insurance sector,” Marsh said in its statement on Friday.
Marsh said it was also conducting its own review of its aviation insurance business, with the help of an external law firm.
The FCA declined to comment. The watchdog was given new powers in 2015 to crack down on uncompetitive behaviour, and had hitherto only mentioned one other enforcement case, in March last year, without elaborating further.
The watchdog has powers to fine firms the equivalent of up to 10 percent of worldwide turnover in the last business year.
Aviation insurance - covering airlines against damages to their planes and injuries to passengers caused by accidents or war or terror attacks - totalled around 1.5 billion pounds in gross written premium in 2015 across Lloyd’s of London and other London-based insurers.
The sector has been under pricing pressure for several years, due to increased competition given relatively high returns compared with many asset markets.
Following a report in The Insurance Insider, Aon said in a statement late on Thursday that it was “working diligently” with the regulator, but could not comment on the details of the ongoing investigation.
It said aviation broking represented less than $100 million in global revenue in 2016.
JLT, in a statement earlier on Friday, said it was “providing all appropriate assistance to the FCA”, and UIB and Willis Towers Watson said in emailed statements that they were “cooperating fully” with the FCA investigation.
Additional reporting by Huw Jones; Editing by Rachel Armstrong and Susan Fenton