The Motor Trades Association of Australia (MTAA) has welcomed the Australian Competition and Consumer Commission’s (ACCC) decision to oppose Insurance Australia Group’s (IAG) proposed acquisition of RAC Insurance (RACI) from the Royal Automobile Club of Western Australia, describing it as a critical step in protecting competition, consumers and the viability of Australia’s automotive repair industry.
MTAA Interim Executive Director Peter Jones said the ACCC’s findings reflected the concerns raised by MTAA and its state members and recognised the real risks of further consolidation in an already highly concentrated motor insurance market.
“We applaud the ACCC for taking a strong and decisive position,” Mr Jones said.
“The regulator has acknowledged what motorists and repairers have been experiencing for years: market consolidation among major insurers is reducing competition, driving up premiums, and narrowing consumer choice.”
The ACCC confirmed today that the proposed acquisition would likely result in a substantial lessening of competition in both motor vehicle insurance and home and contents insurance in Western Australia. RACI is the state’s leading insurer and a strong competitive force. The ACCC found that removing RACI from the market would leave IAG with more than half of WA’s motor insurance market and significantly weaken competitive pressure on remaining insurers.
Mr Jones said the ACCC’s decision sends an important signal amid a broader pattern of consolidation across the country.
“Already this year, Australia has seen two major acquisitions approved – IAG’s takeover of RACQ Insurance in Queensland and Allianz’s purchase of RAA Insurance in South Australia,” he said.
“If this deal had proceeded, three long-standing member-based insurers would have disappeared in less than 12 months. This is not coincidence; it is a trend.”
MTAA warned that consolidation of this scale carries major risks not only for consumers, but also for the thousands of independent repair businesses that service communities across Australia. When only a handful of dominant insurers remain, their bargaining power increases, creating pressure to reduce repair rates, impose restrictive agreements and limit motorists’ freedom to choose their preferred repairer.
“The ACCC has rightly recognised that Western Australians—and Australians more broadly—deserve a competitive market with genuine choice,” Mr Jones said.
In light of the consolidation pressures highlighted by the ACCC’s decision, MTAA has renewed its call for the introduction of a mandatory national Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct to establish fair, transparent and consistent rules governing insurer–repairer interactions.
ENDS
Media contact
Andrew Molloy
Manager Marketing & Communications
Victorian Automotive Chamber of Commerce
P: 03 9829 1248 | M: 0457 188 375
E: amolloy@vacc.com.au
