ACCC Deepens Investigation into IAG's Proposed RAC Insurance Acquisition

In May 2025, IAG announced its intention to acquire RAC Insurance, a leading provider of motor, home, and contents insurance in Western Australia. The proposed transaction, valued at approximately A$1.35 billion, includes a 20-year exclusive distribution agreement for RAC-branded insurance products.

The ACCC's Phase 2 review indicates that the acquisition could substantially lessen competition in both motor vehicle and home insurance markets in Western Australia. ACCC Chair Gina Cass-Gottlieb highlighted that combining two of the largest insurers in the region raises significant competition concerns, potentially leading to higher premiums and reduced consumer choice.

Industry stakeholders have echoed these apprehensions. The Motor Trades Association of Australia (MTAA) has expressed support for the ACCC's thorough investigation, warning that further consolidation could strengthen the dominance of a few insurers, thereby diminishing competition and adversely affecting consumers and businesses.

As the ACCC continues its detailed assessment, the outcome of this review will be pivotal in determining the future landscape of Western Australia's insurance industry. The regulator is seeking submissions from interested parties by 4 May 2026, with a final decision expected in the coming months.

For home services business owners, this development is particularly relevant. A reduction in competition could lead to increased insurance premiums and fewer options for coverage, making it essential for business owners to stay informed and consider how potential changes in the insurance market might affect their operations and financial planning.