The competition regulator has called for feedback on the WA personal lines market as it starts reviewing IAG’s proposed $1.35 billion acquisition of RAC Insurance.

The plan to buy the WA motoring club’s insurance business was announced last month following IAG’s similar deal with RACQ and Allianz Australia’s RAA underwriting acquisition, which have both gained regulatory clearance.

The Australian Competition and Consumer Commission has invited submissions on the RAC transaction by July 2. It expects to release a decision or statement of issues on September 4.

RAC’s products are distributed through its network via call centres, WA physical branches and its website.

“The ACCC’s investigation is focused on the impact of the proposed acquisition on competition in Australia and, in particular, in WA,” the regulator says in a letter to interested parties.

It is seeking views on how closely IAG and RAC compete, the influence of other providers, the deal’s likely impact on home and motor product prices and quality, and possible repair service repercussions.

The ACCC has previously cautioned that its approval of the RACQ and RAA deals should not be seen as indicative of its thinking on RAC.

“The competitive dynamics and issues in each transaction are unique and the ACCC is considering each transaction individually,” it said earlier this month.

Equity analyst group Jarden has suggested IAG may face a tougher challenge gaining WA clearance, with RAC a stronger competitor in that market compared with RACQ in Queensland. It also has a track record of market share gains.

“Coupled with stronger profitability, RAC appears to be a more financially viable standalone competitor,” the analysts said in a research report last month.

Details of the RAC inquiry are available here.

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