Australian Regulator Blocks IAG's Proposed Takeover of RAC Insurance

Australia's competition regulator has blocked Insurance Australia Group's (IAG) proposed acquisition of RAC Insurance, concluding the deal would lead to a significant increase in market concentration and harm consumers in Western Australia.

Regulator Warns of Market Dominance

The Australian Competition and Consumer Commission (ACCC) announced its opposition on Wednesday following an in-depth review. The regulator determined that the merger would combine two of the largest insurers in the state, giving IAG a dominant position.

According to the ACCC's findings, the acquisition would result in IAG controlling:

• 55% to 65% of the motor insurance market in Western Australia.
• 50% to 60% of the home and contents insurance market in the state.

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"The acquisition would combine two large insurers, resulting in a substantial increase in IAG's market share and a significant increase in market concentration," ACCC Chair Gina Cass-Gottlieb said in a statement. The regulator noted that RAC Insurance is currently the market leader in both segments.

Background of the Review

IAG, listed on the ASX under the ticker IAG, initially sought clearance for the deal in 2025. The ACCC first voiced its opposition in December of that year, prompting the company to notify the acquisition under Australia's formal merger regime, which initiated a new review in January 2026.

The ACCC concluded that IAG and RAC Insurance are effective competitors and that other insurers in the market would be unlikely to provide sufficient competitive pressure to offset the negative impact of the merger. This decision effectively halts IAG's expansion plans through the acquisition in the Western Australian market.