Australia’s competition regulator has raised preliminary concerns about Insurance Australia Group’s (IAG) proposed takeover of RAC Insurance (RACI), warning it could reduce competition in Western Australia’s insurance market.
In a statement issued Thursday, the Australian Competition and Consumer Commission (ACCC) said the deal was likely to substantially lessen competition in both motor and home and contents insurance.
“RACI is the leading provider of both motor and home and contents insurance in Western Australia and has a significantly larger market share in each compared to any other insurer,” said ACCC Commissioner Philip Williams. “We are concerned that the acquisition would increase concentration in an already highly concentrated market.”
The regulator warned that reduced rivalry could allow IAG to raise premiums, cut service quality, or limit competitors’ access to cost-effective repair networks, which are critical to the insurance sector.
IAG, which already sells policies under brands including NRMA, CGU and ROLLiN’, would underwrite RAC-branded motor and home insurance if the deal proceeds.
The ACCC has invited submissions on its Statement of Issues until 18 September 2025, before making a final decision.
