Sydney, May 4, 2026, 04:02 AEST
Insurance Australia Group Ltd faces a key regulatory cutoff this Monday on its A$1.35 billion bid for RAC Insurance. The competition watchdog is wrapping up a detailed review, with final submissions due that day—outcome pending, but it could shape IAG’s push to solidify its position in Western Australia. If cleared, IAG would take over the underwriting arm of RAC Insurance, handling both policy risk and claims backing.
This isn’t just a standard merger review anymore; timing is key here. The Australian Competition and Consumer Commission has pushed the deal to its Phase 2 stage—a more in-depth look. The ACCC’s deadline for a decision is set for Aug. 26.
This comes ahead of the ASX’s opening bell in Sydney, so IAG shareholders won’t see an official market update until later. According to the exchange, standard cash-market trading kicks off at about 09:59:45 Sydney time and wraps up at 16:00.
ACCC Chair Gina Cass-Gottlieb called the deal a merger of “two of the biggest insurers in WA”. According to Cass-Gottlieb, RACI already stands as “WA’s market leader”, and the regulator is now examining possible risks to competition in both home and contents, as well as motor vehicle insurance. ACCC
The regulator’s decision paper noted the deal would bring together RACI—the top player in home and contents insurance across Western Australia—and IAG, its biggest rival. For motor insurance, the ACCC said RACI would be teaming up with IAG, currently its number two competitor, pointing out that other insurers in the state have either failed to expand or have lost ground in terms of market share.
Premiums aren’t the only concern here. The ACCC is digging into smash repair services too, with questions around whether a bigger IAG might limit competitors’ access to repairers or hike their costs after an accident.
IAG held its ground Wednesday, saying in an ASX statement that the ACCC hasn’t made a decision yet. The company said it’s still confident in its stance and will cooperate with the regulator through what could be a 90-business-day process.
RAC threw its support behind the deal as well, voicing respect for the ACCC’s process and saying it’s still confident the partnership will let it keep delivering competitive, reliable cover to its members. There’s no change for policyholders just yet, with the two companies still operating separately.
The deal on the table, first revealed in May 2025, puts A$400 million on RAC Insurance for a full takeover, plus another A$950 million tied to a 20-year pact covering distribution and brand licensing. RAC has said it’ll continue offering insurance under its own brand, but IAG is set to handle the heavy lifting—underwriting, managing claims, shaping products, setting prices.
IAG is doubling down on its motor-club playbook, a formula it rolled out in Queensland. The company wrapped up its 90% acquisition of RACQ Insurance on Sept. 1. Fast-forward to February, and IAG reported a first-half net profit after tax of A$505 million, with underlying insurance profit hitting A$804 million. Gross written premium landed at A$8.93 billion — that’s premiums booked before any reinsurance or other deductions.
Back in February, Chief Executive Nick Hawkins described the RAC partnership as a way to “preserve the much-loved, local RAC brand and WA-based services.” IAG said its core businesses handle over A$17 billion in insurance premiums annually, writing policies through NRMA Insurance, RACV, RACQI, CGU and WFI in Australia, and in New Zealand via NZI, State, AMI and Lumley.
Repair industry voices have been calling for a closer look. The Motor Trade Association of Western Australia backed the Phase 2 review, with Chief Executive Neil Le Febvre warning that more consolidation in the WA insurance market risks narrowing consumer options and piling added stress on independent automotive repairers.
Still, the deal isn’t off the table. The ACCC maintains it hasn’t made a final decision; for IAG, the worry is a lengthier regulatory slog ahead, tighter requirements, or outright rejection if questions on pricing, service standards, or repair shop access go unresolved.
