Australian Competition and Consumer Commission raises antitrust concerns on Aon’s $30 billion bid for Willis Towers Watson

Australia’s antitrust regulator has raised initial concerns over Aon’s $30 billion acquisition bid for Willis Towers Watson which aims to create the world’s biggest insurance broker.

The development comes in the wake of similar moves by EU antitrust regulators.

In a statement the Australian Competition and Consumer Commission (ACCC) said, the merger could significantly hurt competition in reinsurance and employee benefits, broking and advisory services in Australia and is a commercial risk.

The coronavirus-induced pandemic has triggered a dramatic rise in insurance claims which along with falling valuations have sparked several deals in the insurance sector.

Aon and Willis declined comments.

The ACCC said, the deal is likely to lead to price hikes or reduced service levels for high-value or large commercial insurance customers; it could also potentially limit the insurance coverage and pricing smaller brokers could get for their customers.

It was also very concerned on the impact the merger would have on reinsurance broking services, which it deems as being important for the Australian economy.

Australian insurers have seen a surge in claims from natural disasters, including hailstorms and wildfires and have bumped up their reinsurance covers in recent times to help shield the impact of these unforeseen large-scale payouts.

In December 2020, the European Commission had raised similar concerns on the deal but suspended its investigation in February and is awaiting for more data from the U.S. insurance broker which are specific to this case. The ACCC has requested feedback on the issues by March 12.

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