The competition watchdog has delayed a decision over one of several major takeovers of club insurance services by the insurance companies.
The Australian Competition has requested the RAA, the insurance arm of South Australia’s Royal Automobile Association, for more information on its partnership bid with global insurance giant Allianz and has pushed back a decision due on Thursday to release its findings.
The ACC has not released any further information including the new scheduled date of these findings.
But it comes as the ACCC also considers two major buyouts by IAG, one in Queensland announced last year, of RACQ insurance and a similar partnership to provide the insurance services for the RAC WA.
Both are awaiting decisions from the ACCC.
Should the ACCC object to proposal on consumer or competition grounds, the partners have recourse to appeal at the Australian Competition Tribunal.
While major corporations are not unused to lengthy legal battles, this process can add years to a proposal before it comes into affect.
Last week’s WA proposal is worth $1.35 billion and will net 1.3 million members and their potential repairs.
But the deal has already raised the objections of the MTAA who believes it will disadvantage customers and repairers.
MTAA interim CEO Rod Camm told media the acquisition would lead to less choice for consumers and the crash repairers the state-based MTAs represented.
“What we do know is if there’s an uneven amount of market power in any market, it’s not normally great for service or for price and that’s our concern here,” he told the ABC.
“The RAC is a big part of the market in Western Australia so taking them off the board is a real worry.”
RAC Group CEO Rob Slocombe says the long term deal in WA would strengthen the value they could give to their members across Western Australia.
“IAG brings national scale, global reinsurance capability and industry-leading technology to support RAC members, along with a deep understanding of member focused organisations, “ Slocombe says.
The ACC has not yet considered the WA deal but the provisional date for announcement of ACCC’s findings on the RACQ acquisition is also scheduled for May 22 either as a final decision or release of a Statement of Issues.