The Motor Trades Association of Australia (MTAA) has raised serious concerns following reports that Insurance Australia Group (IAG) has renewed its bid to acquire RAC Insurance from the Royal Automobile Club of Western Australia.
MTAA Interim Executive Director Peter Jones said the renewed attempt highlights the ongoing consolidation of Australia’s motor insurance sector and reinforces concerns previously identified by the Australian Competition and Consumer Commission (ACCC).
The ACCC previously opposed the proposed acquisition in December 2025, concluding that the transaction would likely result in a substantial lessening of competition in the supply of motor vehicle insurance and home and contents insurance in Western Australia.
The regulator also found that the deal would give IAG a dominant market position, with around 55–65 per cent of the motor insurance market and 50–60 per cent of the home insurance market in Western Australia.
“This proposal cannot be viewed in isolation,” Jones said.
“We are seeing a steady consolidation of Australia’s insurance sector, with long-standing motoring club insurers increasingly absorbed by large national corporations.”
Jones noted that recent years have already seen major acquisitions reshape the sector, including IAG’s takeover of RACQ Insurance in Queensland and Allianz’s purchase of RAA Insurance in South Australia.
“A further move on RAC Insurance would continue a pattern that is concentrating significant market power in the hands of only a few insurers,” he said.
MTAA has consistently warned that the removal of independent motoring club insurers weakens competition and reduces consumer choice in the motor insurance market.
Jones said the implications extend beyond insurance markets to the thousands of independent repair businesses that support Australian motorists.
“When a small number of dominant insurers control large shares of the market, their bargaining power increases significantly,” he said.
“That can place pressure on independent repair businesses, restrict motorists’ ability to choose their preferred repairer and ultimately affect service outcomes for consumers.
“This is about preserving genuine competition in Australia’s motor insurance market,” Jones said.
“Motorists deserve choice, transparency and a competitive marketplace that supports fair outcomes for both consumers and the repair industry.”
The ACCC issued a market survey as part of its ongoing assessment of the proposal. The survey closed on March 12.
MTAA has renewed its call for the introduction of a mandatory national Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct to establish clear and enforceable rules governing insurer–repairer relationships.
MTAA’s submission to the ACCC on IAG’s original proposed acquisition of RAC Insurance can be found here.