• ACCC opposes IAG's proposed acquisition of RAC Insurance Pty Limited (RACI) in Western Australia
• Acquisition would likely result in a substantial lessening of competition in motor vehicle and home/contents insurance
• RACI is the market leader in both motor vehicle and home/contents insurance in Western Australia

The ACCC has decided to oppose Insurance Australia Group Limited (ASX: IAG)'s proposed acquisition of RAC Insurance Pty Limited (RACI) from the Royal Automobile Club of Western Australia Inc. Following a detailed investigation, the ACCC has concluded that the proposed acquisition would likely result in a substantial lessening of competition in the supply of motor vehicle insurance and the supply of home and contents insurance in Western Australia. RACI is the market leader in both motor vehicle insurance and home and contents insurance in Western Australia. It competes strongly through its well-recognised RAC WA brand, competitive pricing, and high-quality service. IAG is one of the two largest personal insurers in Australia and is also a strong performer in Western Australia. The proposed acquisition would combine these two large insurers, leaving IAG with overall market shares of approximately 55 to 65 per cent in motor vehicle insurance and approximately 50 to 60 per cent in home and contents insurance in Western Australia. The ACCC carefully considered the level of competition provided by other insurance suppliers in Western Australia, including established insurers Suncorp, Allianz, and QBE, and mid-tier insurers Auto & General, Youi, and Hollard. However, the ACCC found that although alternative insurers compete in Western Australia, they would be unlikely to prevent the significant loss of competition that would likely result from the proposed acquisition. The ACCC also closely examined the level of competition RACI would provide in the alternative scenario where it is not acquired by IAG and concluded that RACI remains a strong and profitable competitor and is adequately positioned to continue to compete effectively in Western Australia in the future.