The Australian Competition and Consumer Commission has prohibited Insurance Australia Group Limited from acquiring RAC Insurance after a Phase 2 assessment found the transaction would be likely to substantially lessen competition in Western Australia’s motor vehicle and home and contents insurance markets. The acquisition would combine two effective competitors and give IAG estimated market shares of approximately 55% to 65% in motor vehicle insurance and 50% to 60% in home and contents insurance. RAC Insurance is the market leader in both markets, while IAG is a significant competitor that the regulator expects to become stronger if the transaction does not proceed. The commission found that other insurers would be unlikely to constrain the combined business sufficiently. It did not find enough evidence to conclude that IAG would restrict rivals’ access to repair services or that the deal would substantially lessen competition for smash repair services in particular regions. The decision follows the commission’s opposition to the transaction under the previous informal merger regime in December 2025. The parties may apply for approval on public benefit grounds, which would require the commission to assess whether likely public benefits outweigh likely public detriment.
2026-09-23Australian Competition and Consumer Commission
Australian Competition and Consumer Commission blocks IAG acquisition of RAC Insurance over Western Australia competition concerns
The Australian Competition and Consumer Commission has blocked IAG’s proposed acquisition of RAC Insurance, finding it would likely substantially lessen competition in Western Australia’s motor vehicle and home and contents insurance markets. The deal would give IAG estimated market shares of 55% to 65% and 50% to 60%, respectively, while other insurers would be unlikely to provide sufficient competitive constraint.