The Danish Competition Council has raised concerns over competition in the non-life insurance market for private individuals, citing high market concentration, rising premiums, and significant earnings disparities among customer groups. The five largest insurers control approximately 80% of the market, and their return on equity is notably higher than expected in a competitive environment.
In response, the Council is considering launching its first-ever market investigation under a new legal framework introduced in 2024. This would allow authorities to intervene in insurance companies’ pricing practices if they are found to significantly weaken competition, even without a direct violation of competition law. The investigation will scrutinize pricing strategies, including the widespread practice of annual price indexation, which may contribute to tacit price coordination and inflated premiums for loyal customers.
The analysis also highlights that older customers, those with lower education levels, and long-term policyholders tend to pay higher premiums than new customers, increasing insurers’ profits. A public consultation on the potential market investigation is open until April 29. If the probe proceeds, it could lead to regulatory measures aimed at enhancing competition and lowering costs for Danish consumers.
