The competition watchdog has raised concerns over the third of the club insurance buyouts and is seeking further submission over the IAG acquisition of RACI in WA.
In a release of preliminary views, the ACC says the purchase of RACI by IAG was likely to have the effect of substantially lessening competition in the supply of motor insurance in Western Australia.
The concerns follow decisions by the ACCC that gave the green light to approval of two similar acquisitions of club insurers by the IAG of RACQ in Queensland and of Allianz in RAC in south Australia.
IAG completed the Queensland deal with RACQ last week
The decision led to the MTAA and state-based MTAs criticising the move as a serious blow for competition in those states that would concentrate market power, impact small repair businesses. and reduce choice for consumers.
READ MORE: Competition watchdog approves latest club insurance takeover
For the WA bid, the ACCC has outlined its areas of concerns, saying the issues were shared for both vehicle and home insurance:
“The Proposed Acquisition would increase concentration in already highly concentrated markets,” the ACCC noted in it paper.
“RACI is a large and growing competitor that focusses on value for its customers, and competes closely with IAG, and the Proposed Acquisition would remove the significant competitive constraint IAG and RACI presently impose on each other.”
It also noted that other existing insurers in Western Australia, or new players “are unlikely to provide a sufficient competitive constraint on IAG post-acquisition.”
The ACCC also listed other concerns saying it was concerned that the Proposed Acquisition would enable IAG to profitably increase the prices and/or reduce the service quality of its existing and RACI branded motor insurance service offerings.
The ACC will now look for submission from the industry and effected parties on these preliminary findings.
IAG Response
In response major insurer IAG said it would continue to work “collaboratively with the ACCC in relation to its review and will continue to engage with the regulator in relation to the matters raised in the Statement of Issues.”
“We are committed to partnering with RAC to serve and protect more Western Australians and welcome the further consultation that will now occur. We continue to believe the alliance with RAC builds on our shared heritage as mutuals, and strong sense of customer and community.” IAG Managing Director and CEO Nick Hawkins said in a statement.
Interested parties should provide submissions by 5pm on 18 September 2025. Responses may be emailed to mergers@accc.gov.a