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 deal, 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 a deeper investigation into how this acquisition could affect market dynamics. The regulator has expressed apprehension that the consolidation of two major insurers might lead to diminished competition, potentially resulting in higher premiums and fewer choices for consumers.

Gina Cass-Gottlieb, Chair of the ACCC, highlighted these concerns, stating, "This acquisition would combine two of the biggest insurers in WA. We consider the acquisition could substantially lessen competition in both the supply of motor vehicle insurance and the supply of home and contents insurance in Western Australia."

Industry stakeholders have echoed these sentiments. The Motor Trades Association of Australia (MTAA) has voiced support for the ACCC's thorough review, emphasizing the need to maintain a competitive landscape to protect consumer interests and ensure fair market practices.

For tradespeople and small business owners in Western Australia, the outcome of this review is particularly significant. A reduction in competition could lead to increased insurance costs, directly impacting operational expenses and financial planning. It's crucial for those in the trades sector to stay informed about these developments and consider how potential changes in the insurance market might affect their coverage options and premiums.

The ACCC has invited submissions on the Phase 2 review, with a deadline set for 4 May 2026. This period allows industry participants, consumer advocacy groups, and the public to provide input on the proposed acquisition's implications.

As the review progresses, it's essential for tradespeople to assess their current insurance policies and explore alternative providers to ensure they continue to receive comprehensive coverage at competitive rates. Staying proactive in understanding market changes will aid in making informed decisions that safeguard both personal and business interests.