The Australian Competition and Consumer Commission (ACCC) has raised preliminary concerns about Insurance Australia Group Limited's (IAG) proposed acquisition of RAC Insurance Pty Limited (RACI). Both companies are key providers of motor insurance and home and contents insurance in Western Australia.

The acquisition, if approved, would see IAG underwriting insurance products under the RAC brand. The ACCC's initial assessment suggests that this move could significantly reduce competition in the Western Australian insurance market.

"RACI is the leading provider of both motor and home and contents insurance in Western Australia and has a significantly larger market share in each compared to any other insurer," said ACCC Commissioner Dr Philip Williams.

RACI currently holds a dominant position in the market, being the leading provider of motor and home and contents insurance in the region. The ACCC's concern is that the acquisition would lead to increased market concentration, potentially allowing IAG to raise premiums and diminish the quality of insurance offerings.

"We are concerned that the acquisition would increase concentration in an already highly concentrated market," Williams stated.

Another point of concern for the ACCC is the potential impact on rival insurers' access to quality and cost-effective repair services in Western Australia. The acquisition could enable IAG to restrict competitors' access to these services or increase their costs for acquiring them.

IAG is a general insurance company listed on the Australian Securities Exchange, operating in both Australia and New Zealand. It offers a variety of personal and commercial insurance products under multiple brand names. Meanwhile, RAC is a Western Australian member-owned mutual association that provides roadside assistance, general insurance products, and other services. The proposed acquisition does not include RAC's other operations, such as roadside assistance, auto servicing, finance, and travel services.

The ACCC has invited submissions in response to its Statement of Issues by 18 September 2025.

"RACI competes strongly in Western Australia with its well-recognised brand and focus on customer service. It also appears likely to continue to compete strongly in the future, if the proposed acquisition does not eventuate," Williams noted.

The ACCC's concerns highlight the potential implications of the acquisition on market dynamics and consumer choice in Western Australia. The outcome of this review could have significant ramifications for the insurance landscape in the region.