Italy Opens Competition Review of Motor Insurance Market

Key Takeaways

• Competition Framework Under Review: Italian regulators are examining whether long-standing features of the motor insurance market continue to promote competition or have become obstacles to it.
• Bonus-Malus Systems Face Scrutiny: The investigation will assess whether risk classification mechanisms such as bonus-malus systems and merit classes affect competitive dynamics among insurers.
• Black Boxes in the Spotlight: Regulators will explore whether telematics devices that track driving behavior create barriers for consumers seeking to switch providers.
• Questions Around Price Transparency: The review will examine whether complex discounts and product structures limit the effectiveness of comparison tools, including Preventivass.
• Joint AGCM-IVASS Effort: The inquiry combines competition and insurance-sector expertise as authorities evaluate potential reforms in a market worth approximately €13.5 billion in annual premiums.

Deep Dive

The Italian Competition Authority (AGCM) said it has launched a market investigation into the country's motor insurance sector, a review that will be conducted jointly with insurance supervisor IVASS. The inquiry will examine whether parts of the market's structure (including risk classification systems, claims procedures and consumer switching mechanisms) are working as intended or creating obstacles to competition.

Motor insurance remains one of Italy's largest consumer financial markets. Premiums totaled roughly €13.5 billion in 2025, according to the authority. Because coverage is mandatory for vehicle owners, even relatively small distortions can affect millions of consumers.

The investigation follows years of legislative and regulatory changes aimed at making the market more competitive. Many of those reforms were introduced after recommendations from AGCM itself. Yet the authority said questions remain about whether some features of the market continue to restrict competitive pressure between insurers.

One area of focus will be the systems used to classify risk and determine premiums. The review will examine bonus-malus mechanisms and merit classes, long-standing features of the Italian market that reward or penalize drivers based on claims history. These systems were designed to align pricing with risk. Regulators now want to understand whether they also influence competition in ways that were never intended.

The inquiry will also scrutinize the direct compensation procedure used in motor insurance claims. While the authority did not identify specific concerns, the mechanism has become an important part of how insurers interact with both customers and competitors, making it a natural subject for review.

Some of the most interesting questions involve technology.

AGCM and IVASS said they will examine the role of devices that monitor driving behavior and vehicle activity, including black boxes. Such devices have become increasingly common in motor insurance, often allowing insurers to offer discounts or more tailored pricing. The regulators are interested in a different question: whether these products make it harder for consumers to switch providers once they have entered into a relationship with an insurer.

That same concern appears elsewhere in the investigation.

The authorities said they will evaluate whether increasingly complex commercial offers and discount structures are affecting the usefulness of price comparison tools. Among the platforms under consideration is Preventivass, the comparison service intended to help consumers assess competing insurance offers more easily.

Taken together, the areas selected for review point to a broader question. Competition authorities are no longer looking only at price levels or market concentration. They are increasingly interested in the mechanics of competition itself, like how consumers compare products, how easily they can switch providers, and whether systems built to improve efficiency inadvertently create friction.

The investigation does not allege misconduct by any insurer, nor does it target specific companies. Instead, it represents an attempt by AGCM and IVASS to examine whether the market's underlying architecture still serves the purpose regulators intended when many of these rules and systems were introduced.

For a sector built around mandatory purchases, that question carries unusual weight. Consumers can choose their insurer. They cannot choose whether to buy insurance in the first place.

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