Motor Trades Association of Australia interim executive director, Peter Jones, has re-iterated his support of the Australian Competition and Consumer Commission’s (ACCC) decision to oppose Insurance Australia Group’s (IAG) proposed acquisition of RAC Insurance (RACI) from the Royal Automobile Club of Western Australia.
Jones described it as a critical step in protecting competition, consumers and the viability of Australia’s automotive repair industry.
"The ACCC's decision to block this acquisition demonstrates what happens when regulators put competition and consumer protection first. With IAG and Allianz already absorbing RACQ and RAA Insurance respectively, this intervention prevents what would have been a devastating trifecta for market competition in 2026," he said.
"What's at stake here goes beyond insurance premiums. When member-based insurers disappear and market power concentrates in just two or three major players, it's the everyday motorist who loses – through higher costs, fewer choices, and reduced access to their preferred repairer.
"The ACCC has drawn a line in the sand at a critical moment. Now we need to build on this decision with structural reform. That's why MTAA continues to push for a mandatory Motor Vehicle Insurance and Repair Industry Code of Conduct—to ensure fair treatment of repairers and protect consumers' right to choose, regardless of who insures their vehicle.
"This decision isn't just about Western Australia. It's a wake-up call about the future of competition in motor insurance across the entire country."
He said the ACCC’s findings reflected the concerns raised by MTAA and its state members and recognised the real risks of further consolidation in an already highly concentrated motor insurance market.
“The regulator has acknowledged what motorists and repairers have been experiencing for years: market consolidation among major insurers is reducing competition, driving up premiums, and narrowing consumer choice," Jones said.
He added that the ACCC’s decision sends an important signal amid a broader pattern of consolidation across the country.
“If this deal had proceeded, three long-standing member-based insurers would have disappeared in less than 12 months. This is not coincidence; it is a trend," he said.
MTAA warned that consolidation of this scale carries major risks not only for consumers, but also for the thousands of independent repair businesses that service communities across Australia. When only a handful of dominant insurers remain, their bargaining power increases, creating pressure to reduce repair rates, impose restrictive agreements and limit motorists’ freedom to choose their preferred repairer.
“The ACCC has rightly recognised that Western Australians – and Australians more broadly – deserve a competitive market with genuine choice,” Jones said.
In light of the consolidation pressures highlighted by the ACCC’s decision, MTAA has renewed its call for the introduction of a mandatory national Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct to establish fair, transparent and consistent rules governing insurer–repairer interactions.
Late last year, the ACCC decided to oppose IAG’s proposed acquisition of RAC Insurance Pty Limited (RACI) from the Royal Automobile Club of Western Australia Inc.
Following a detailed investigation, the ACCC concluded that the proposed acquisition would likely result in a substantial lessening of competition in the supply of motor vehicle insurance insurance in Western Australia.
RACI is the market leader in both motor vehicle insurance in Western Australia. It competes strongly through its well-recognised RAC WA brand, competitive pricing and high quality service, including customers’ claims experiences.
IAG is one of the two largest personal insurers in Australia and is also a strong performer in Western Australia. It has a well-known brand in NRMA, strong IT capabilities, and considerable financial resources.
The proposed acquisition would combine these two large insurers, leaving IAG with overall market share of approximately 55 to 65 per cent in motor vehicle insurance in Western Australia.
“We concluded that the proposed acquisition would eliminate the significant competition between IAG and RACI, and reduce the competitive pressure they each place on rival insurance brands,” ACCC Chair Gina Cass-Gottlieb said.
“We concluded that the acquisition would be likely to allow IAG, after acquiring RACI, to increase premiums and reduce the quality of its suite of insurance products, with likely flow-on effects to the offerings of other insurers.”
The ACCC carefully considered the level of competition provided by other insurance suppliers in Western Australia, including established insurers Suncorp, Allianz, and QBE, and mid-tier insurers Auto & General, Youi, and Hollard.
The ACCC found that although alternative insurers compete in Western Australia, they would be unlikely to prevent the significant loss of competition that would likely result from the proposed acquisition.
“Given the historical difficulties rivals have had growing their share in Western Australia, the ACCC is concerned that IAG would face insufficient competitive constraints post-acquisition,” Cass-Gottlieb said.
The ACCC also closely examined the level of competition RACI would provide in the alternative scenario where it is not acquired by IAG.
In particular, the ACCC considered the challenges faced by the insurance industry, and how these challenges may affect RACI, including the growth in the number of extreme weather events over time and rising reinsurance, claims, and regulatory costs.
“Our investigation found that RACI remains a strong and profitable competitor and is adequately positioned to manage these challenges. We have concluded that if IAG doesn’t acquire RACI, RACI would have the capability to continue to compete effectively in Western Australia in the future,” Cass-Gottlieb said.
The ACCC also considered whether the proposed acquisition would allow IAG to restrict competing insurers’ access to repair services, but found limited evidence to suggest IAG would have the ability or incentive to engage in such conduct.