Summary
QBE Insurance (Australia) Limited - proposed acquisition of the credit insurance broking business of National Credit Insurance (Brokers) Pty LimitedMarket definition
The ACCC adopted narrow markets to assess the proposed acquisition. If no competition concerns exist using a narrow definition then none are usually likely using a broader one. The markets adopted were the national markets for:- The supply of credit insurance services; and
- The supply of credit insurance broking services.
Competition analysis
QBE supplies credit insurance services. NCIB supplies credit insurance broking services. Given its vertical nature, the ACCC examined whether the proposed acquisition would be likely to allow:- QBE to foreclose competition in the credit insurance broking services market by, for example, requiring all potential QBE customers to use NCIB; and/or
- NCIB to foreclose competition in the credit insurance services market by, for example, requiring all potential NCIB clients to insure with QBE.
The ACCC considered that QBE was unlikely to possess market power in the market for the supply of credit insurance services, which includes a number of significant competitors to QBE, including three of the largest four trade credit insurers worldwide. Consequently, post-acquisition, QBE would be unlikely to be able to foreclose competition in the trade credit insurance broker market by forcing its customers to use NCIB.
The ACCC considered that, post-acquisition, NCIB would be unlikely to require its clients to insure with QBE as financial regulation would then require NCIB to cease acting as an insurance broker.
Consequently, the ACCC considered that the proposed acquisition would be unlikely to substantially lessen competition in any relevant market.
Merger type
Vertical
Initiation
Parties