IAG’s RACQ underwriting unit pursuit raises competition concerns in Australia

The Australian Competition and Consumer Commission (ACCC) has raised concerns over IAG’s deal to buy 90% of RACQ’s insurance underwriting business for A$1.32bn ($812.7m).

The deal has prompted the regulator to seek opinions on its potential impact on the insurance market, particularly in personal lines general insurance and ancillary repair services.

The ACCC's inquiry focuses on the competitive dynamics between IAG and RACQ, including how they compete in the provision of home, contents and motor insurance.

The regulator is also assessing the potential effects of the acquisition on pricing and quality of insurance products, as well as the implications of IAG's increased scale on the procurement of ancillary repair services.

The ACCC has highlighted areas of overlap where both IAG and RACQ currently operate, such as the supply of personal lines general insurance and the acquisition of various motor and building repair services.

The concern is whether the merger could lead to less competition, resulting in higher prices or lower service quality for consumers.

IAG's proposal includes an option to acquire the remaining 10% of RACQ's insurance business two years after the initial transaction is completed.

The ACCC has requested interested parties to submit their views by 14 February 2025.

In Australia, IAG is known for offering a variety of personal and commercial insurance products through its owned brands, which include NRMA Insurance, Swann Insurance, ROLLiN’, Cylo and Lumley Special Vehicles.

RACQ is a member-owned organisation based in Queensland, offering services such as roadside assistance, insurance, banking and community support.

"IAG’s RACQ underwriting unit pursuit raises competition concerns in Australia " was originally created and published by Life Insurance International, a GlobalData owned brand.

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