Australia’s competitors watchdog has raised preliminary considerations relating to Insurance coverage Australia Group’s (IAG) supposed acquisition of RAC Insurance coverage (RACI) from the Royal Vehicle Membership of Western Australia.
The Australian Competitors and Shopper Fee (ACCC) fears that the merger might “considerably” reduce competitors within the insurance coverage sector in Western Australia (WA).
The deal, valued at $1.35bn (A$2.06bn), features a 20-year unique distribution and model licensing settlement for RAC-branded insurance coverage merchandise.
IAG and RACI each supply motor insurance coverage in addition to dwelling and contents insurance coverage to clients in WA.
The proposed acquisition by IAG doesn’t embody RAC roadside help or its different operations equivalent to auto servicing, finance and journey companies.
The ACCC’s preliminary view means that the acquisition would possibly result in elevated premiums and a discount within the high quality of insurance coverage merchandise.
The ACCC has additionally voiced considerations that the acquisition “could allow IAG to restrict rival insurers’ entry to high quality and cost-effective repairers in Western Australia or enhance rivals’ prices of buying restore companies within the state”.
Such a transfer might enhance the prices for rivals to amass restore companies, which is a crucial part of insurance coverage choices.
The regulator has invited public submissions on the matter till 18 September 2025.
ACCC Commissioner Philip Williams stated: “RACI competes strongly in Western Australia with its well-recognised model and give attention to customer support. It additionally seems prone to proceed to compete strongly sooner or later, if the proposed acquisition doesn’t eventuate.
“We’re involved that the acquisition would enhance focus in an already extremely concentrated market.”
The Royal Vehicle Membership of Western Australia operates as a member-owned mutual affiliation, providing roadside help, basic insurance coverage and different companies to its members.
