Aussie Regulator Concerned Over IAG’s Plan to Buy RACI

The Australian Competition and Consumer Commission (ACCC) on Thursday expressed its preliminary concerns with Insurance Australia Group Limited’s (IAG) proposal to acquire RAC Insurance Pty Limited (RACI) for $877 million from the Royal Automobile Club of Western Australia.

IAG and RACI both supply motor insurance and home and contents insurance in Western Australia, and the proposed acquisition would result in IAG underwriting motor insurance and home and contents insurance under the RAC brand.

The ACCC’s preliminary view has been that the proposed acquisition is likely to have the effect of substantially lessening competition in both the supply of motor insurance and the supply of home and contents insurance in Western Australia.

ACCC Commissioner Dr Philip Williams said that RACI is the leading provider of both motor and home and contents insurance in Western Australia and has a significantly larger market share in each compared to any other insurer.

RACI competes strongly in Western Australia with its well-recognised brand and focus on customer service. It also appears likely to continue to compete strongly in the future, if the proposed acquisition does not eventuate, he said.

“We are concerned that the acquisition would increase concentration in an already highly concentrated market,” Dr Williams said.

The ACCC is concerned that the reduction in competition may enable IAG to increase premiums and reduce the quality of its own and RACI’s motor insurance and home and contents insurance products in the future.

It is also concerned that the proposed acquisition may enable IAG to limit rival insurers’ access to quality and cost-effective repairers in Western Australia or increase rivals’ costs of acquiring repair services in the state.

Accessing repair services, such as smash repairs, windscreen repairs and home repairs, is a key aspect of providing insurance, and restricting access to such services would likely reduce the competitiveness of rival insurers in Western Australia.

In this context, the ACCC has invited submissions in response to the Statement of Issues by 18 September 2025.

About IAG

IAG is listed on Australian Securities Exchange (ASX) and is a general insurance company operating in Australia and New Zealand. It provides a range of personal and commercial insurance products in Australia directly under its owned brands, including NRMA, Swann Insurance, ROLLiN’, Cylo and Lumley Special Vehicles.

Through its joint venture business, Insurance Manufacturers of Australia Pty Limited, IAG provides personal lines insurance in Victoria distributed by its joint venture partner RACV.

In addition, IAG provides intermediated insurance through brokers, authorised financial representatives, institutions and agents under the CGU and WFI brands. It also underwrites insurance products distributed by financial institutions, including Bendigo and Adelaide Bank, People’s Choice Bank and, since 2023, ANZ Bank.

The Royal Automobile Club of Western Australia (RAC) is a Western Australian based member-owned mutual association that provides roadside assistance, general insurance products, and other ancillary services to its members. RACI underwrites motor insurance and home and contents insurance for RAC.

The proposed acquisition does not involve the acquisition by IAG of RAC’s roadside assistance business or its other operations including RAC’s auto servicing and repair services, finance, retirement living, home security, batteries, tyres, travel and tourism operations.