The ACCC has blocked IAG’s proposed acquisition of RAC Insurance, finding the deal would substantially reduce competition in Western Australia’s motor and home insurance markets.
Following an in-depth Phase 2 assessment, the regulator ruled IAG must not proceed with the acquisition.
RAC Insurance is WA’s market leader in motor vehicle and home and contents insurance, while IAG is already a significant competitor through brands including NRMA.
The acquisition would give IAG an estimated 55 to 65 per cent share of WA’s motor insurance market and 50 to 60 per cent of the home and contents insurance market.
“The acquisition would combine two large insurers, resulting in a substantial increase in IAG’s market share and a significant increase in market concentration,” ACCC chair Gina Cass-Gottlieb said.
The ACCC concluded other insurers would be unlikely to provide enough competitive pressure to offset the loss of competition between IAG and RAC Insurance.
The regulator also investigated whether IAG could restrict rival insurers’ access to repair services. It considered competition for smash repair services in several WA regions but found insufficient evidence that the acquisition would substantially lessen competition in those markets.
The decision is the ACCC’s second rejection of the proposed deal. The regulator opposed it under the previous informal merger process in December 2025, before IAG resubmitted the acquisition under the mandatory merger regime introduced in January.
It is the first time such an application has been made since the ACCC's new system for reviewing large mergers and acquisitions took effect on January 1, 2026.
IAG has confirmed it will now lodge a public benefit application, asking the ACCC to consider whether the wider benefits of the proposed partnership outweigh its competition concerns.
IAG CEO Nick Hawkins said the sale would result in "long-term benefits for members, customers and communities across Western Australia".