IAG will continue engaging with the competition regulator after it raised concerns over the group’s proposed $1.35 billion takeover of RAC Insurance.  

“We are committed to partnering with RAC to serve and protect more Western Australians and welcome the further consultation that will now occur,” IAG CEO Nick Hawkins said. 

“We continue to believe the alliance with RAC builds on our shared heritage as mutuals and strong sense of customer and community.”

The Australian Competition and Consumer Commission last week released a statement of issues on WA market impacts, after earlier this year waving through a similar deal involving IAG and RACQ, plus the Allianz acquisition of RAA underwriting.

The ACCC says RAC has a significantly larger share of the WA motor and home markets than other insurers and competes strongly with a well-recognised brand and focus on customer service.

Commissioner Philip Williams says it appears RAC would continue to compete strongly if the transaction did not eventuate, and the ACCC is concerned the deal would increase concentration in an already highly concentrated market.

It also fears the deal may enable IAG to limit rival insurers’ access to quality and cost-effective repairers in WA, or increase rivals’ costs of acquiring repair services.

RAC, which has about 1.3 million motor club members, reported $1.3 billion of gross written premium and net earned premium of more than $1 billion in 2023-24.

Submissions on the statement of issues are due by September 18 and the ACCC now anticipates making a final decision on November 27.

If the ACCC rejects the deal, IAG can appeal to the Australian Competition Tribunal.

In February last year, the tribunal cleared Suncorp’s bank sale to ANZ after the ACCC blocked it the previous August.