ACCC opposes IAG's proposed acquisition of RAC Insurance

The ACCC has decided that Insurance Australia Group Limited (ASX: IAG) (IAG) must not put into effect its proposed acquisition of RAC Insurance (RACI).

Following an in-depth Phase 2 assessment, the ACCC is satisfied that IAG’s proposed acquisition would have the effect or likely effect of substantially lessening competition in the supply of motor vehicle insurance and in the supply of home and contents insurance in Western Australia.

In March 2026, IAG notified the ACCC of a proposal to acquire RACI from RACI Pty Ltd, a wholly owned subsidiary of the Royal Automobile Club of Western Australia Inc. If put into effect, the acquisition would have resulted in IAG underwriting motor insurance and home and contents insurance under the RAC brand in Western Australia.

IAG and RACI both supply motor vehicle insurance and home and contents insurance in Western Australia. RACI is the market leader in both motor vehicle insurance and home and contents insurance in Western Australia, where it operates under the RAC WA brand.

IAG is one of the two largest personal insurers in Australia. It is a significant competitor in Western Australia and supplies insurance products under a range of brands, including the well-known NRMA brand.

The proposed acquisition would leave IAG with overall market shares in Western Australia of approximately 55 to 65 per in motor vehicle insurance and approximately 50 to 60 per cent in home and contents insurance.

“The acquisition would combine two large insurers, resulting in a substantial increase in IAG’s market share and a significant increase in market concentration,” ACCC Chair Gina Cass-Gottlieb said.

“If the acquisition were to proceed, we consider the level of constraint from other insurers would be unlikely to be sufficient to address the loss of competition arising from the acquisition.”