Highlights

  • ACCC moves to block IAG’s acquisition of RAC Insurance, citing competition concerns in WA.
  • IAG could control 55–65% of motor vehicle and 50–60% of home insurance market.
  • RACI is considered capable of continuing independent operations in Western Australia.

Insurance Australia Group Limited’s (ASX:IAG) proposed acquisition of RAC Insurance Pty Limited (RACI) from the Royal Automobile Club of Western Australia Inc. Following a detailed review, the ACCC concluded that the deal would likely result in a significant reduction of competition in motor vehicle insurance and home and contents insurance markets in Western Australia.

Market Impact of the Proposed Deal
RACI currently leads both the motor vehicle and home insurance markets in WA, competing through its RAC WA brand, competitive pricing, and customer claims service. IAG is one of the two largest personal insurers in Australia and maintains a notable presence in Western Australia under its NRMA brand.

The proposed acquisition would combine these two insurers, giving IAG an estimated market share of 55–65% in motor vehicle insurance and 50–60% in home and contents insurance in Western Australia. The ACCC’s assessment found that such consolidation would eliminate substantial competition between IAG and RACI, potentially reducing competitive pressure on other insurers.

Alternative Insurers and Competition Constraints
The ACCC reviewed the level of competition from other insurers operating in WA, including established players Suncorp, Allianz, and QBE, along with mid-tier providers Auto & General, Youi, and Hollard. While these insurers are active in the market, the regulator concluded that they would be unlikely to offset the significant loss of competition resulting from the proposed acquisition.

Historical data on market growth indicates that rivals have struggled to expand their share in WA. As a result, the ACCC determined that IAG could face limited competitive constraints if the acquisition proceeds.

RACI’s Independent Position
The ACCC also examined RACI’s capability to continue operating independently. Despite industry challenges such as increasing extreme weather events, rising reinsurance and claims costs, and regulatory pressures, the investigation concluded that RACI remains well-positioned to compete effectively in WA without being acquired by IAG.

Share Price Snapshot
IAG was trading 0.829% lower at AUD 7.77 per share as of 11 December 2025.