UK starts probe on motor insurance sector

LONDON: Britain's Office of Fair Trading (OFT) has begun a probe into the country's motor insurance market to determine whether certain consumers are being treated fairly and if there can be more effective competition in the sector.

The OFT said on Thursday it had issued a call for evidence into how the sector operates, given that annual car insurance premiums in Britain were reported to have risen by as much as 40 percent in the year ending March 31, 2011.

"As part of its work, the OFT is interested in examining reports that car insurance premiums in Northern Ireland are significantly higher than they are in the rest of the UK, and understanding the reasons for any difference," it added in a statement.

Britain's biggest listed car insurer is Admiral Group Plc , whose shares fell sharply last month on concerns that regulators could clamp down on a lucractive part of its business.

Copyright Reuters, 2011