The Australian Competition and Consumer Commission (ACCC) has determined that Insurance Australia Group Limited (IAG) must not proceed with its proposed acquisition of RAC Insurance (RACI). Following a thorough Phase 2 assessment, the ACCC concluded that the acquisition would likely lead to a substantial lessening of competition in the motor vehicle and home insurance markets in Western Australia.

IAG notified the ACCC of its intention to acquire RACI in March 2026. If approved, the acquisition would have allowed IAG to underwrite insurance under the RAC brand in Western Australia, where RACI is the market leader in both motor vehicle and home insurance.

The ACCC's analysis revealed that the acquisition would significantly increase IAG's market share, potentially reaching 55-65% in motor vehicle insurance and 50-60% in home and contents insurance. ACCC Chair Gina Cass-Gottlieb emphasized that the merger would combine two major competitors, leading to increased market concentration and reduced competitive pressure.

The ACCC conducted extensive inquiries, analyzing information from IAG, RACI, and other industry stakeholders. The findings indicated that both companies are effective competitors in the insurance market, and that IAG would likely remain a strong competitor if the acquisition did not proceed.

While the ACCC considered potential concerns regarding IAG's access to repair services, it found insufficient evidence to suggest that IAG would restrict access to competing insurers. Additionally, the ACCC assessed the impact on the market for smash repair services but concluded that there was no substantial lessening of competition in that area.

In December 2025, the ACCC initially opposed the acquisition based on available information. Following IAG's formal notification of the acquisition under the new merger regime in January 2026, the ACCC reaffirmed its stance against the merger. If the ACCC denies approval, parties may submit a public benefit application to assess whether the acquisition could yield public benefits that outweigh potential detriments.