Making Insurers Unsure: The Danish Competition Authority may use its New Competition Tool in the Insurance Sector

On 1 April 2025, the Danish Competition and Consumer Authority announced the launch of a potential market investigation based on the analysis conducted by the Competition Council of the private non-life insurance market in Denmark.

On 1 July 2024, new regulations were introduced into the Danish Competition Act (please refer to our update on this here), which included the possibility for the Danish Competition and Consumer Authority (“DCCA”) to initiate market investigations and issue behavioural orders to address identified weaknesses of competition and potentially prevent behaviour that could develop into competition law violations. Sector inquiries can be initiated without having found a violation of competition law, marking a significant shift in the approach to competition monitoring.

Before a market investigation can be initiated, a public consultation must be conducted, and any decision to initiate a market investigation must be published. 

In this case, the focus of the potential market investigation will be on the pricing conduct of non-life insurance companies in Denmark, as the Competition Council has in a report found that there are indications of limited competition within this market. 

The public consultation, in which stakeholders may provide input on the need for and scope of the market investigation, lasted until 29 April 2025. Following the end of the consultation, the Competition Council will decide whether a market investigation should be initiated, and ultimately, whether the DCCA should issue behavioural orders. 

One of the primary reasons for the interest in this sector is that price changes in the sector are generally based on an annual index adjustment, which is primarily based on wages in the private sector and may be considered to constitute a form of tacit price collusion when implemented by all actors in the sector. As this has led to a significant increase in prices relative to other industries, the DCCA is considering whether this negatively impacts on competition. 

According to the Competition Council’s report, annual price adjustments in the private non-life insurance market reduce uncertainty about companies' pricing strategies, which can hinder effective competition. The report has demonstrated that (i) loyal consumers, (ii) consumers over 65 years old, and (iii) consumers with limited education levels are particularly hard hit by these price adjustments. Largely, consumers do not react to price increases because the increases are not continuously notified.

Moreover, the five largest companies control 80% of the market and market concentration is high relative to other EU Member States. This concentration can lead to less innovation and fewer choices for consumers, which is a concern for the DCCA.

For more information or further guidance in this area, please contact Morten Nissen, Alexander Brøchner or Selma Hjorth Aslan. 

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