Insurance Australia Group’s proposed acquisition of RAC Insurance Pty Limited (RACI) is in doubt after the Australian Competition and Consumer Commission (ACCC) raised concerns.
The ACCC said the acquisition could harm consumers by reducing competition in the Western Australia (WA) insurance market.
Under the deal IAG would become the underwriter of RAC-branded motor and home insurance policies, consolidating a market already dominated by a few large players.
ACCC Commissioner Philip Williams said RACI was the leading provider of motor and home and contents insurance in WA, with a significantly larger share in each market compared to any other insurer.
“We are concerned that the acquisition would increase concentration in an already highly concentrated market,” Williams said in a media release.
This could potentially lead to higher premiums and a reduction in product quality for consumers.
The regulator also believed the acquisition could allow IAG to limit competitors’ access to reliable and affordable repair services such as smash repairs, windscreen replacements, and home repairs.
RACI underwrites motor insurance and home and contents insurance for, and is wholly owned by, the Royal Automobile Club of Western Australia (RAC).
The ACCC has invited submissions from stakeholders and the public by 18 September 2025 via [email protected].
IAG (ASX: IAG) shares were unchanged at $8.68, capitalising the company at $20.39 billion, at the time of writing, after trading between $8.48 and $8.77.
