Reinsurance News

Singapore’s competition watchdog seeks consultation on Aon / WTW merger

9th April 2021 - Author: Luke Gallin

The Competition and Consumer Commission of Singapore (CCCS) is currently assessing whether the proposed combination of re/insurance brokers Aon and Willis Towers Watson (WTW) violates competition rules in the country.

aon-willis-towers-watson-merger-antitrustCompetition related concerns continue to be raised, and the announcement from the CCCS follows reports that the European Commission is in the process of preparing a statement of objections for its own antitrust concerns.

After receiving a notification from Aon for a decision on the proposed merger, the CCCS is now exploring whether the deal “would infringe section 54 of the Competition Act (Cap. 50B), which prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition within any market in Singapore.”

Specifically, Aon’s notification to CCCS relates to the supply of retirement benefits consulting services and human capital consulting services, of which the two brokers overlap in supplying services.

As stated by Aon, these markets include: the supply of retirement benefits consulting services in Singapore, or potentially regional; and the global supply of human capital consulting services.

Insurance and reinsurance broker Aon feels that its proposed combination with rival WTW will not result in “a substantial lessening of competition in either of these relevant markets in Singapore” – for a number of reasons.

Among these, according to Aon, is the fact that the combined entity will remain subject to strong competitive pressure from its competitors in the country, which includes some established market players.

Additionally, Aon argues that the retirement benefits consulting markets continue to evolve and attract more competitors. Furthermore, the broker finds no significant barriers to entry or expansion in the market for competitors and also highlights the importance of quality staff.

On the global supply of human capital consulting services, Aon notes that this market is highly fragmented in Singapore and, again, that barriers to entry are low and there exists no capacity constraints in providing these types of services.

CCCS is now inviting feedback on the proposed combination of Aon and WTW until April 16th, 2021 at 2pm.

As we’ve discussed previously, reports suggest a remedy proposal was submitted to the EC and recent reports suggest a sale of Willis Re remains a likely component of any divestiture, along with reports that Gras Savoye in France may as well.

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