The Motor Trades Association of Australia has made a last-minute call for industry players to respond to an ACCC survey on IAG’s renewed bid to purchase RAC’s insurance business.
The Motor Trades Association of Australia has made a last-minute call for industry players to respond to an ACCC survey on IAG’s renewed bid to purchase RAC’s insurance business.
ASX-listed Insurance Australia Group (IAG) proposes to acquire 100 per cent of the issued share capital in RAC Insurance.
It lodged an application last week with the Australian Competition and Consumer Commission for assessment under the regulator’s new mandatory merger regime, which took effect on 1 January this year.
Details of its new application have not been made public.
The new application came after the ACCC ruled in December that it would oppose IAG’s first bid, which valued the RAC insurance business at $1.35 billion.
The ACCC concluded the acquisition would likely result in a substantial lessening of competition in the supply of motor vehicle insurance and home and contents insurance in Western Australia.
It found that the deal would give IAG about 60 per cent of the motor insurance market and 55 per cent of the home insurance market in Western Australia.
To help with its new assessment, the ACCC has released a questionnaire on the acquisition and requires responses by tomorrow, 12 March 2026.
MTAA Interim Executive Director Peter Jones said it was critical that the voices of repair businesses were heard during the review.
“We strongly encourage all stakeholders across the automotive repair sector to respond to the ACCC survey and outline their concerns about further consolidation in the insurance market,” he said.
Mr Jones said the renewed acquisition attempt highlighted the ongoing consolidation of Australia’s motor insurance sector.
“This proposal cannot be viewed in isolation,” he said.
“We are seeing a steady consolidation of Australia’s insurance sector, with long-standing motoring club insurers increasingly absorbed by large national corporations.”
In recent years, IAG has acquired RACQ Insurance in Queensland and another big player, Allianz, purchased RAA Insurance in South Australia.
“A further move on RAC Insurance would continue a pattern that is concentrating significant market power in the hands of only a few insurers,” Mr Jones said.
He said the implications extend beyond insurance markets to the thousands of independent repair businesses that support Australian motorists.
“When a small number of dominant insurers control large shares of the market, their bargaining power increases significantly,” he said.
“That can place pressure on independent repair businesses, restrict motorists’ ability to choose their preferred repairer and ultimately affect service outcomes for consumers.”
IAG managing director Nick Hawkins reaffirmed his group’s commitment to forming a strategic alliance with the RAC, when reporting the company’s results in February.
“The partnership will preserve the much‑loved, local RAC brand and WA‑based services,” Mr Hawkins said.
“We will continue to invest in the RAC member experience and deliver high‑quality, competitive insurance products for Western Australians.”
RAC has argued that the sale of its insurance business to a larger company makes sense because of tougher regulations, more frequent natural disasters and the rising cost of reinsurance.
"We still believe the proposed partnership has merit and would be beneficial for our teams and members," it said in a statement."
