It might result in higher prices or less services for large clients.
The Australian Competition & Consumer Commission (ACCC) is concerned that the proposed Aon-Willis Towers Watson (WTW) merger will shrink the competition in the commercial risk, reinsurance, and employee benefits broking in the country.
The proposed merger may result in higher prices or reduced service levels for large, complex or high-value commercial insurance clients, the watchdog said. It may also limit the insurance coverage and pricing that smaller brokers can obtain for their customers.
The ACCC is looking if the merger will particularly affect the supply of reinsurance which covers all current and future policies written by the primary insurer for particular risks.
In addition, it is worried that the three major employee benefits brokers in Australia will be reduced into two, and it might heighten the risk of coordinated effects in the markets where Aon and WTW compete.
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.
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