Sydney, May 4, 2026, 04:02 AEST
Insurance Australia Group Ltd’s proposed A$1.35 billion purchase of RAC Insurance reaches a regulatory deadline on Monday, with submissions due to Australia’s competition regulator on an in-depth review that could decide whether IAG can expand further in Western Australia. The transaction would give IAG control of RAC Insurance’s underwriting business, the part of an insurer that takes on policy risk and backs claims.
The timing matters because the case has moved beyond a routine merger check. The Australian Competition and Consumer Commission lists the deal as under Phase 2, a detailed assessment, with the determination period due to end on Aug. 26.
It also lands before the ASX opens in Sydney, leaving IAG investors to wait for any formal market update later in the day. The exchange says normal cash-market trading starts around 09:59:45 Sydney time and runs to 16:00.
ACCC Chair Gina Cass-Gottlieb said the acquisition would “combine two of the biggest insurers in WA”. She also said RACI is “WA’s market leader”, and the regulator is looking at potential harm in motor vehicle insurance and home and contents insurance. ACCC
The regulator’s decision paper said the deal would combine RACI, the leading supplier in home and contents insurance in Western Australia, with IAG, its largest competitor. In motor insurance, the ACCC said the deal would combine RACI with IAG, its second-largest competitor, while alternative insurers had struggled to grow or hold market share in the state.
The review is not just about premiums. The ACCC is also looking at smash repair services, including whether a larger IAG could restrict rival insurers’ access to repairers or raise their costs after car accidents.
IAG has kept its line steady. In an ASX release, the company said the ACCC had not reached a conclusion, that it remained confident in its position, and that it would work constructively with the regulator through a process expected to take up to 90 business days.
RAC has also backed the deal, saying it respects the ACCC process and remains confident the partnership would help it keep offering competitive and reliable insurance to members. RAC says there is no immediate change for policyholders while the two businesses remain separate.
The proposed deal, announced in May 2025, includes A$400 million for 100% of RAC Insurance and A$950 million for a 20-year distribution and brand licensing agreement. RAC said it would keep selling RAC-branded insurance, while IAG would take on underwriting, claims management, product development and pricing.
For IAG, the deal would extend a motor-club strategy already seen in Queensland. The company completed the acquisition of 90% of RACQ Insurance on Sept. 1, and in February reported first-half net profit after tax of A$505 million, underlying insurance profit of A$804 million and gross written premium — premiums written before deductions such as reinsurance — of A$8.93 billion.
Chief Executive Nick Hawkins said in February that the RAC partnership would “preserve the much-loved, local RAC brand and WA-based services.” IAG also said its main businesses underwrite more than A$17 billion of insurance premium a year across brands including NRMA Insurance, RACV, RACQI, CGU and WFI in Australia, and NZI, State, AMI and Lumley in New Zealand.
Repairers have pushed for scrutiny. The Motor Trade Association of Western Australia welcomed the Phase 2 review, and Chief Executive Neil Le Febvre said further consolidation in the WA insurance market could reduce consumer choice and place more pressure on independent automotive repair businesses.
But the deal is not dead. The ACCC has said it has not reached a final view; the risk for IAG is that the regulator’s deeper review forces a longer approval path, fresh conditions or a rejection if concerns over prices, service quality or repairer access are not answered.
