ACCC Scrutinises IAG's Proposed Acquisition of RAC Insurance

In May 2025, IAG announced its intention to acquire RACI, a move that would consolidate two of the largest insurers in the region. The deal, valued at AUD 1.35 billion, includes AUD 400 million for RACI's shares and a AUD 950 million upfront payment tied to a 20-year exclusive distribution agreement for RAC-branded insurance products.

Both IAG and RACI offer motor, home, and contents insurance in Western Australia. The proposed acquisition would result in IAG underwriting policies under the RAC brand, potentially altering the competitive dynamics of the market.

ACCC Chair Gina Cass-Gottlieb highlighted the significance of this consolidation, stating, "This acquisition would combine two of the biggest insurers in WA. RACI is WA’s market leader both in motor vehicle insurance and in home and contents insurance." The ACCC is concerned that the merger could reduce competition in these key insurance segments.

The regulator has not yet reached a final decision and will continue its assessment during the Phase 2 review. Stakeholders have been invited to submit their views by 4 May 2026, providing an opportunity for public input on the potential implications of the acquisition.

Under the Competition and Consumer Act, a Phase 2 review may extend up to 90 business days, unless circumstances necessitate an extension. This thorough examination underscores the ACCC's commitment to maintaining a competitive insurance market that serves the best interests of consumers.

As the review progresses, industry observers and policyholders alike will be keenly watching for outcomes that could reshape the insurance landscape in Western Australia.