ACCC again blocks IAG’s RAC Insurance deal

ACCC blocks the proposal again

The Australian Competition and Consumer Commission has again opposed Insurance Australia Group’s proposed acquisition of RAC Insurance in Western Australia, saying the transaction would reduce competition in the state’s insurance markets. The deal was valued at $1.35 billion, and the regulator’s decision follows an earlier opposition in December 2025 before the proposal was re-lodged under the formal merger regime that began on 1 January 2026. ¹²³⁴

The ACCC said its in-depth Phase 2 assessment found the acquisition would have the effect, or likely effect, of substantially lessening competition in the supply of motor vehicle insurance and home and contents insurance in Western Australia. ACCC chair Gina Cass-Gottlieb said the transaction would combine two large insurers, significantly lift IAG’s market share and increase market concentration. ²³⁴

What the regulator found

The regulator estimated the deal would leave IAG with about 55% to 65% of the WA motor vehicle insurance market and about 50% to 60% of the home and contents market. RAC Insurance is the market leader in both lines in the state, while IAG already competes there primarily through the NRMA brand after moving customers away from SGIO from 2022, according to Insurance Business. ²³⁴

The ACCC also examined whether the acquisition would let IAG restrict rival insurers’ access to repair services, and separately whether it would lessen competition in smash repair services in some WA regions. It said it did not have sufficient evidence to be satisfied on either point. ³⁴

ABC reported that the ACCC said the purchase would likely increase premiums, although the regulator had not calculated by how much. The ACCC also said the level of competition would be reduced because IAG and RAC are strong competitors in Western Australia. ¹²

Next step for IAG and RAC

IAG said it will lodge a public benefit application under the ACCC’s merger control regime, which allows the regulator to assess broader public benefits alongside competition concerns. Insurance News said the ACCC then has 50 business days to make a decision, subject to any extensions, and that IAG has signalled it will continue to pursue approval through that pathway. ¹²³⁴

IAG chief executive Nick Hawkins said the RAC IAG partnership would create long-term benefits for members, customers and communities across Western Australia through IAG’s technology platforms, claims management expertise, financial stability and global reinsurance protection. RAC Group chief executive Rob Slocombe said the proposal would strengthen RAC’s ability to respond to a changing insurance landscape and reduce the risk it carries alone. ¹²

Background to the proposal

RAC WA announced the arrangement in May 2025 as a 20-year general insurance partnership under which IAG would acquire and manage the underwriting business while RAC continued to distribute the product under its own brand, retaining local branches, claims teams and call centres. The ACCC’s latest ruling is the second rejection of the proposal after its original opposition under the previous informal merger process. ¹³⁴