ACCC Reviewing IAG’s Takeover of RAC Insurance: What’s at Stake for WA Consumers

The Australian Competition and Consumer Commission (ACCC) has launched a review into Insurance Australia Group’s (IAG) proposed takeover of RAC Insurance, a deal valued at around $877 million. The move signals heightened scrutiny over the potential impact on competition in Western Australia’s insurance sector, where RAC has long held a trusted position with consumers.

IAG, already one of the nation’s largest insurers, is seeking to expand its footprint in WA by acquiring RAC Insurance—a household brand with deep roots in community trust and local loyalty. However, the deal has raised red flags with regulators, who are concerned about whether the merger would reduce competition, increase premiums, or limit consumer choice in an already concentrated insurance market.

Why the ACCC Is Concerned

The ACCC’s role is to ensure that acquisitions don’t result in market dominance that disadvantages consumers. If IAG absorbs RAC Insurance, it could significantly alter the competitive landscape in WA, leaving fewer alternatives for households and businesses shopping for cover.

RAC’s brand strength lies in its member-first approach, community focus, and reputation for customer service. There are fears that integration into a large corporate structure like IAG could dilute that identity and shift priorities toward profit maximization rather than member value.

Implications for WA Residents

For everyday West Australians, the outcome of this review could have real financial consequences. A reduction in market competition could mean:

• Higher premiums across home, car, and contents insurance.

• Fewer policy options, reducing consumer flexibility.

• Potential loss of the member-driven model that has differentiated RAC from its corporate peers.

On the other hand, proponents argue that IAG’s acquisition could bring economies of scale, operational efficiency, and potentially broader product offerings—if competition safeguards are enforced.

The Bigger Picture

The review comes at a time when cost-of-living pressures are front and centre for WA families. With insurance costs already on the rise due to climate-related risks, natural disasters, and economic inflation, the stakes of this review are particularly high.

For the ACCC, this decision will set a precedent in how it handles consolidation in critical service markets that directly affect household budgets. For WA’s business community, the case also serves as a barometer for how aggressively regulators will police mergers in the years ahead.

The Takeaway

The IAG-RAC Insurance review isn’t just another corporate transaction—it’s a test of balance between big business expansion and consumer protection in Western Australia. The ACCC’s decision will either reshape the insurance sector in WA or reaffirm the principle that community trust and competition matter more than corporate consolidation.

For West Australians, the message is clear: the outcome of this review could hit close to home, directly influencing the affordability and accessibility of essential insurance products.