Insurance Australia Group’s (IAG) renewed attempt to acquire RAC Insurance from the Royal Automobile Club (RAC) of Western Australia has drawn fresh criticism from the Motor Trades Association of Australia (MTAA), which warned that the deal would deepen an already concerning pattern of consolidation across Australia’s motor insurance sector.
The Australian Competition and Consumer Commission (ACCC) blocked the proposed transaction in December 2025, concluding that it would substantially lessen competition in the supply of motor vehicle insurance and home and contents insurance in Western Australia. The regulator found that the deal would hand IAG a dominant position, controlling approximately 55%–65% of the state’s motor insurance market and 50%–60% of its home insurance market.
IAG, however, made a second attempt to secure regulatory approval for the deal under the country’s new mandatory merger control regime, which came into effect on 1 January. The ACCC is assessing the revised notification in Phase 1 initial review, and a statutory decision deadline has been set for 17 April.
The renewed bid could not be assessed in isolation, according to MTAA interim executive director Peter Jones.
“We are seeing a steady consolidation of Australia’s insurance sector, with long-standing motoring club insurers increasingly absorbed by large national corporations,” he said.
Jones pointed to recent transactions that had already reshaped the competitive landscape, including IAG’s acquisition of RACQ Insurance in Queensland and Allianz’s purchase of RAA Insurance in South Australia.
“A further move on RAC Insurance would continue a pattern that is concentrating significant market power in the hands of only a few insurers,” he said.
The MTAA warned that the implications extend beyond policyholders to the thousands of independent repairers that service Australian motorists. Jones noted that as a small number of dominant insurers consolidate their market positions, their bargaining power over repair businesses increases, restricting motorists’ ability to choose their preferred repairer and affecting service outcomes more broadly.
“When a small number of dominant insurers control large shares of the market, their bargaining power increases significantly,” Jones said. “That can place pressure on independent repair businesses, restrict motorists’ ability to choose their preferred repairer and ultimately affect service outcomes for consumers.”
The ACCC has issued a market survey as part of its continuing assessment of the renewed proposal. The MTAA is urging repairers and industry participants to submit responses, and has separately renewed calls for the introduction of a mandatory national Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct to establish enforceable rules governing insurer–repairer relationships.
The association said regulators must evaluate the cumulative impact of sector-wide consolidation rather than assessing individual transactions in isolation.
“This is about preserving genuine competition in Australia’s motor insurance market,” Jones said. “Motorists deserve choice, transparency, and a competitive marketplace that supports fair outcomes for both consumers and the repair industry.”
In February last year, the motor trade body raised similar concerns, urging the regulator to block the transaction.
