The Motor Trades Association of Australia (MTAA) has welcomed the decision by the Australian Competition and Consumer Commission (ACCC) to undertake a more detailed review of Insurance Australia Group’s (IAG) proposed acquisition of RAC Insurance.
The move signals growing concern about further consolidation in Australia’s insurance sector and its impact on competition, consumers and the automotive repair industry.
MTAA interim executive director Peter Jones said the decision validates long-standing concerns from industry that consolidation in the insurance market is reaching a tipping point.
“This is not just another merger. The ACCC’s decision to undertake a Phase 2 review confirms that serious competition issues are at play,” Jones said.
“While we welcome the ACCC’s decision to undertake a detailed review, it is imperative that this merger is ultimately stopped.
“Further consolidation risks entrenching the dominance of a small number of insurers, reducing genuine competition and ultimately driving poorer outcomes for motorists and small businesses alike.”
MTAA has consistently warned that increasing concentration in the insurance market is already flowing through to the automotive repair sector, where independent repairers face growing pressure on pricing, repair methods and commercial terms.
“The reality is that market power doesn’t stop at the insurance policy. It extends directly into how vehicles are repaired, who repairs them, and under what conditions,” Jones said.
“When insurers gain too much control, independent repairers are squeezed, consumer choice is diminished, and the quality and safety of repairs can be put at risk.”
The ACCC has indicated that its review will consider impacts not only in insurance markets, but also in related sectors including smash repair services, an area of critical importance to MTAA members.
MTAA said this broader lens is essential.
“You cannot separate insurance from repair. They are intrinsically linked, and any reduction in competition upstream inevitably impacts outcomes downstream,” Jones said.
“Without a competitive repair market, consumers face longer wait times, fewer choices, and increasing pressure towards insurer-preferred repair pathways.”
MTAA also cautioned that the proposed acquisition sits within a broader pattern of consolidation across the insurance sector, raising systemic concerns about market structure in Australia.
MTAA is calling on the ACCC to undertake a thorough and uncompromising assessment of the proposal, including its long-term impacts on competition, regional access to services, and the sustainability of small and medium-sized automotive businesses.
“The stakes here are high. This decision will shape the future structure of Australia’s insurance and repair markets,” Jones said.
“We strongly support the ACCC taking the time to get this right.”
MTAA will continue to engage constructively with the ACCC throughout the Phase 2 review process and advocate for outcomes that preserve competition, protect consumers, and support a viable, independent automotive repair sector.