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Highlights

  • The ACCC will not oppose IAG’s proposed $855 million acquisition of a 90% stake in RACQ Insurance.

  • The regulator found the deal unlikely to substantially lessen competition in Queensland’s insurance market.

  • RACQI has been losing market share and struggled to compete effectively due to pricing and structural challenges.

The Australian Competition and Consumer Commission (ACCC) has announced it will not oppose Insurance Australia Group’s (ASX: IAG) proposed $855 million acquisition of a 90% stake in Royal Automobile Club of Queensland Insurance (RACQI).

The decision follows a detailed review of the transaction, originally announced by IAG in November 2024. In a statement released Thursday, the competition watchdog concluded that the acquisition was unlikely to substantially lessen competition in the home and contents insurance and motor insurance markets, particularly in Queensland.

According to the ACCC, IAG’s existing market position would not provide it with sufficient power to lower prices or worsen supply terms after the acquisition. The regulator noted that RACQI had not been an especially aggressive competitor in recent years, with its market share in decline since 2019.

“While RACQI enjoys strong brand recognition, it has not differentiated itself in terms of pricing or product coverage,” the ACCC noted in its findings. “In fact, its pricing has generally been higher than that of many competing providers.”

ACCC Chair Gina Cass-Gottlieb explained the commission’s position further, saying that several insurers—including major players such as Suncorp, Allianz, and QBE, as well as newer entrants like Youi, Auto & General, and Hollard—will continue to provide competition in the Queensland market.

“RACQI faces material challenges in continuing to provide competitive insurance due to it serving some areas of higher natural hazard risk and having limited access to capital as a mutual organisation. These challenges have placed limitations on its capacity to compete,” Cass-Gottlieb said.

The ACCC’s green light removes a significant regulatory hurdle for IAG as it looks to consolidate its presence in the Queensland insurance market.