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Mergers & AcquisitionsMediumUpdated•Originally published 23 September 2026•Updated 23 September 2026•
2 min read

ACCC Blocks IAG’s RAC Insurance Deal; IAG Turns to Public-Benefit Review

Key Facts

1The ACCC blocked IAG’s acquisition of RAC Insurance after a Phase 2 review over competition concerns in Western Australia.
2The ACCC estimated the combined business would hold about 55%–65% of motor insurance and 50%–60% of home-and-contents insurance.
3The A$1.35 billion arrangement includes A$400 million for 100% of RAC Insurance and A$950 million for a 20-year agreement.
4IAG plans to file a public-benefit application with the ACCC under a 50-business-day timetable that may be extended.

The Australian Competition and Consumer Commission (ACCC) decided that IAG must not implement its proposed acquisition of RAC Insurance after an in-depth Phase 2 review. The ACCC found the transaction would, or would likely, substantially lessen competition in Western Australia’s motor vehicle and home-and-contents insurance markets.

The ACCC said the combined business would have held about 55%–65% of the state’s motor vehicle insurance market and 50%–60% of home-and-contents insurance. RAC Insurance leads both markets, while IAG is one of Australia’s two largest personal insurers; the ACCC concluded that remaining rivals would not provide enough constraint to offset the lost competition.

The proposed A$1.35 billion arrangement comprises A$400 million for 100% of RAC Insurance and A$950 million for an exclusive 20-year distribution and brand-licensing agreement. Those figures illustrate the regulatory mechanism: combining two major rivals reduces their pressure on each other over prices and service quality, while the decision prevents IAG from realizing the transaction’s scale and synergies unless it later secures approval.

The competition ruling does not necessarily end the transaction. IAG confirmed it will lodge a public-benefit application, under which the ACCC will weigh claimed customer, community and economic benefits against the competitive harm; the ACCC has 50 business days to decide, subject to extensions.