The Australian Competition and Consumer Commission (ACCC) has officially blocked Insurance Australia Group’s proposed acquisition of RAC Insurance from RACI Pty Ltd, a subsidiary of the Royal Automobile Club of Western Australia. Following an in-depth Phase 2 assessment, the regulator concluded that the transaction would substantially lessen competition across Western Australia’s personal insurance markets.
The proposed acquisition would have allowed IAG to underwrite motor vehicle and home and contents insurance under the RAC brand in Western Australia. However, RAC Insurance is currently the market leader in both sectors within the state, while IAG maintains a significant presence through brands like NRMA. According to ACCC findings, combining the two companies would give IAG a dominant market share of 55 to 65 percent in motor vehicle insurance and 50 to 60 percent in home and contents insurance in Western Australia.
ACCC Chair Gina Cass-Gottlieb stated that combining these major players would significantly increase market concentration without sufficient constraint from remaining competitors. She emphasized that both companies are currently effective competitors and noted that IAG is likely to become an even stronger standalone rival if the merger does not proceed. While the regulator examined potential anti-competitive behavior regarding access to smash repairs, it concluded there was insufficient evidence to support concerns in that area.
The ruling marks the second time the regulator has opposed the buyout. After an informal rejection in December 2025, IAG re-notified the deal under Australia’s formal merger regime that took effect on January 1, 2026. The proposed deal did not include RAC’s broader business operations, such as roadside assistance, auto repairs, finance, or travel services.
Following the Phase 2 rejection, IAG and RAC retain the option to submit a public benefit application to the ACCC. Under this procedure, the regulator has 50 business days to evaluate whether the broader public benefits of the transaction would outweigh its detrimental impacts on market competition.
