The Motor Trades Association of Australia (MTAA) has urged the Australian Competition and Consumer Commission (ACCC) to reject Insurance Australia Group's (IAG) proposed remedy package for its acquisition of RAC Insurance, arguing that the commitments fail to address the structural competition concerns identified by the regulator. MTAA said the deal should not proceed, warning that it would further accelerate consolidation across Australia's insurance and vehicle repair markets.
MTAA Executive Director Bruce Billson said the acquisition was part of a wider national trend in which independent motoring club insurers were being absorbed by major insurance companies. “If this deal proceeds, three motoring club insurers, RACQ, RAA and RAC Insurance, will have been absorbed by major national corporations in under 12 months,” Mr Billson said.
The ACCC found in December 2025 that the acquisition could give IAG a 55% to 65% share of Western Australia’s motor insurance market and remove the state’s leading independent insurer. After re-notifying the transaction under the new mandatory merger regime, IAG proposed a five-year court-enforceable undertaking on 1 July 2026 covering insurance product benchmarking, smash repair exclusivity and a commitment not to own repair facilities in Western Australia. MTAA said the proposed measures were inadequate, highlighting that the RAC brand distribution agreement would run for 20 years and arguing that short-term behavioural commitments would not prevent long-term market impacts.
MTAA said the proposed remedy lacked structural safeguards and would not address concerns around repair pricing, payment terms, parts selection, consumer choice and repairer independence. The association has urged the ACCC to block the acquisition, but said stronger protections would be required if approval is granted, including independent oversight of complaints, enforceable 30-day payment terms, repair cost monitoring and protections for repairers’ professional judgement.