Both Tryg and Alka provide products and services within the field of property and casualty insurance (non-life insurance) for private consumers. As a result of the merger, Tryg became the largest provider of insurance products in Denmark based on both volume and turnover.
Mergers with horizontal overlaps may significantly impede effective competition through unilateral effects. The DCCA’s investigation found that the merger could give rise to unilateral effects in the form of higher consumer prices on the market for private non-life insurance products. The DCCA considered this a consequence of the transaction, which removed the competitive pressure that Alka exerted on Tryg as an independent agent.
It follows from the merger guidelines and relevant case law that some undertakings have a greater influence on the competitive process than their market shares or similar measures would suggest. It is the assessment of the DCCA that Alka has had a significantly larger influence on the competitive process on the market for private non-life insurance than what their market share or similar measures would suggest.
In its’ assessment, the DCCA emphasized that Alkas insurance products rank among the cheapest on the market, that Alka has a well-known brand and has invested heavily in price-directed marketing, and that Alka is an innovative and well operated company that has experienced growing market shares in an otherwise relatively stagnant market. Finally, it is the assessment of the DCCA that no other undertaking has had a comparable effect on the competitive process on the relevant market.
Overall the DCCA considered that the merger would significantly impede effective competition on the market for private non-life insurance.
Tryg offered commitments, to be effective for 5 consecutive years, in order to address the concerns of the DCCA. Tryg committed to terminate exclusivity clauses in a number of Alka and Tryg partnership-agreements, thereby allowing competing insurance companies to enter into agreements with the relevant partners. Furthermore, Tryg committed to not charge customers any form of fee or payment related to the termination of one or more private insurance policies, and to donate 5 million DKK annually to “Forsikringsguiden”, which is an independent insurance and price comparison website hosted by, amongst others, an independent consumer association.
The Danish Competition Council assessed that the commitments were sufficient to address the competition concerns identified by the DCCA.
On 5 November 2018 the Danish Competition Council approved the merger subject to the commitments proposed by Tryg.