Australia’s competitors watchdog has raised preliminary issues relating to Insurance coverage Australia Group’s (IAG) supposed acquisition of RAC Insurance coverage (RACI) from the Royal Car Membership of Western Australia.
The Australian Competitors and Shopper Fee (ACCC) fears that the merger may “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 reminiscent of auto servicing, finance and journey providers.
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 issues that the acquisition “could allow IAG to restrict rival insurers’ entry to high quality and cost-effective repairers in Western Australia or improve rivals’ prices of buying restore providers within the state”.
Such a transfer may improve the prices for rivals to accumulate restore providers, which is an important element of insurance coverage choices.
The regulator has invited public submissions on the matter till 18 September 2025.
ACCC Commissioner Philip Williams mentioned: “RACI competes strongly in Western Australia with its well-recognised model and concentrate on customer support. It additionally seems more likely to proceed to compete strongly sooner or later, if the proposed acquisition doesn’t eventuate.
“We’re involved that the acquisition would improve focus in an already extremely concentrated market.”
The Royal Car Membership of Western Australia operates as a member-owned mutual affiliation, providing roadside help, normal insurance coverage and different providers to its members.
