ACCC greenlights IAG acquisition of RACQI
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The news: IAG’s proposed acquisition of Royal Automobile Club of Queensland Insurance (RACQI) will not be opposed by the Australian Competition and Consumer Commission (ACCC).
The context: IAG announced in November 2024 that it had agreed to buy 90% of RACQI for $855 million.
The regulator said the acquisition was unlikely to substantially lessen competition in the home and contents insurance and motor insurance sectors as IAG was unlikely to have the ability to lower prices or supply terms due to its market position.
The regulator said that it found RACQI had “not been a particularly vigorous competitor in recent times and that it has been losing market share since 2019”.
The ACCC’s review found that while RACQI had strong brand recognition, it did not differentiate in terms of price or coverage and that its prices were generally higher than many alternative suppliers.
What they said: ACCC chair Gina Cass-Gottlieb said: “Several alternative suppliers of home and contents insurance and motor insurance, including the market leader Suncorp, more established insurers Allianz and QBE, and newer entrants such as Youi, Auto & General, and Hollard will continue to compete in Queensland.
“RACQI faces material challenges in continuing to provide competitive insurance due to it serving some areas of higher natural hazard risk, and limited access to capital as a mutual organisation. These challenges have placed limitations on its capacity to compete.”
The source: ACCC
