IAG has released plans to expand its Queensland footprint with a 90 per cent acquisition of the business of one of the state’s leading insurers.
In the proposal, IAG would buy RACQ’s existing insurance underwriting business, with an option to acquire the remaining 10 per cent in two years on consistent terms.
The move which will require approval from the regulator, the ACCC, would bring Queensland’s second biggest player in the home and motor insurance field under the IAG.
Protection to continue
RACQ Chief Executive Officer David Carter says the partnership will help its 1.7 million members live and move “safely, securely and sustainably”into the future.
“IAG has made a major commitment to Queensland and RACQ and brings a deep understanding of member-focused organisations,” Carter says.
“The partnership with IAG contributes to our goal of building a truly resilient state, leaving no Queenslander behind. And we will invest together to ensure RACQ members, employees and all Queenslanders continue to have access to leading insurance products serviced locally, to keep them safe in the long term.”
IAG Managing Director and CEO Nick Hawkins says the new alliance with RACQ builds on IAG’s ability to provide leading insurance products to Queenslanders.
“IAG has a well-established presence in Queensland through our trusted insurance brands, and we are excited to now help protect and serve RACQ’s members.” Hawkins says.
“IAG has a well-established presence in Queensland through our trusted insurance brands, and we are excited to now help protect and serve RACQ’s members.”
“The transaction is a true partnership between IAG and RACQ. It builds on our proven track record of working collaboratively with leading member motoring organisations that share our values.
“RACQ will maintain brand and customer relationships, while leveraging IAG’s scale and financial strength, best-in-class technology for claims, policies and pricing, customer orientated claims experience and underwriting expertise.”
IAG will fund the transaction from surplus capital. The transaction is expected to be EPS accretive in the first full year of ownership and consistent with IAG’s investment targets of a 15 per cent insurance margin and ROE of between 14 per cent and 15 per cent on a ‘through the cycle’ basis.