Automated settlement of motor vehicle claims: Allianz cleared to take over ControlExpert

Yesterday, the Bundeskartellamt cleared plans by Allianz Strategic Investments. S.à.r.l., Luxembourg, (Allianz) to acquire ControlExpert Holding B.V. Amsterdam (ControlExpert).

Allianz belongs to the Allianz Group, an insurance company providing damage, accident, life and health insurance as well as financial services in 70 countries.

ControlExpert is the holding company of the ControlExpert Group which provides vehicle insurance providers, leasing companies and fleet operators with automated IT-based services to settle motor vehicle claims.

Andreas Mundt, President of the Bundeskartellamt: “Allianz is one of the top vehicle insurance providers in Germany. By taking over ControlExpert, the company will acquire the industry’s leading provider of claims settlement services. The merger will not lead to direct market share additions. In view of ControlExpert’s strong market position, we nevertheless had to carefully examine whether its range of services would become indispensable for other vehicle insurance providers as a result of the merger with well-resourced Allianz and whether, as a consequence, ControlExpert’s competitors would have to expect a significant loss of customers.”

Almost all vehicle insurance providers in Germany have outsourced the processing of claims to external service providers such as the target company ControlExpert. In this way, the insurance companies are able to considerably speed up the settlement process and reduce the costs associated with settling claims for losses incurred by their policyholders. The main service currently offered by such service providers is document verification, i.e. the verification of expert assessments, cost estimates, and invoices for vehicle body and glass repairs. However, the market is currently in a phase of transition towards comprehensive fullrange services which start at the occurrence of the damage and largely automate and digitise the entire claims settlement process in a speedy manner. For this purpose, artificial intelligence is used, such as advanced image recognition technology.

Andreas Mundt, President of the Bundeskartellamt: “Our investigations have shown that a number of competitors will still have considerable innovative power and be able to offer comparable services even after the Allianz Group has entered the market. Competitors are also increasingly using artificial intelligence to auto-mate the process of settling car insurance claims. In this market environment, suffi-cient competition is also ensured in the future. We were therefore able to clear the merger project.”

Even the fact that under corporate law ControlExpert will be able to access Allianz’s customer base and its claims data does not change the result of the merger control assessment. When forecasting the merger's effects, the Bundeskartellamt also had to take into account that the market has sufficient capacities to accommodate possible wishes of vehicle insurance companies to change their service providers. With regard to technology companies developing innovative damage assessment tools, such as AI-based image recognition tools, the investigations have indicated that other providers will enter the market in the future.

Therefore, it was ultimately possible to rule out the risk of the merger significantly impeding effective competition.