{"id":117516,"date":"2025-09-04T05:51:09","date_gmt":"2025-09-04T05:51:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/117516\/"},"modified":"2025-09-04T05:51:09","modified_gmt":"2025-09-04T05:51:09","slug":"accc-raises-major-concerns-about-sale-of-racwa-to-industry-giant-iag","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/117516\/","title":{"rendered":"ACCC raises major concerns about sale of RACWA to industry giant IAG"},"content":{"rendered":"

The planned sale of Western Australia’s biggest insurer RACWA to an east-coast based industry giant has raised major alarm bells at Australia’s competition watchdog.<\/p>\n

In a deal worth about $1.3 billion, RACWA plans to sell its entire insurance operations to the Sydney-based IAG<\/a>.<\/p>\n

The Australian Competition and Consumer Commission (ACCC) said that was likely to dramatically reduce competition in WA’s insurance sector.<\/p>\n

The watchdog also warned vehicle and home owners would be at risk of unwarranted increases in premiums, reduced insurance options, poorer coverage, while insurers could lose access to accredited repairers.<\/p>\n

\"An<\/p>\n

The ACCC is concerned the sale will reduce competition and increase premiums for members. (ABC News: Jake Sturmer)<\/p>\n

In a statement, ACCC Commissioner Philip Williams said the proposed acquisition would substantially lessen competition in both the supply of motor insurance and home and contents insurance.<\/p>\n

“RAC competes strongly in Western Australia with its well-recognised brand and focus on customer service,” Dr Williams said.<\/p>\n

“We are concerned that the acquisition would increase concentration in an already highly concentrated market.”<\/p>\n

IAG defends deal<\/p>\n

In response, IAG acknowledged the ACCC’s views but defended the proposed sale.<\/p>\n

RACWA sells insurance operations to IAG <\/a><\/p>\n

RACWA has announced a 20-year deal with insurance company Insurance Australia Group, handing over its entire insurance underwriting business.<\/p>\n

It said it had already been working with the ACCC to address the issues raised, with a final decision expected on November 27.<\/p>\n

\u201cWe are committed to partnering with RAC to serve and protect more Western Australians and welcome the further consultation that will now occur,” IAG CEO Nick Hawkins said.<\/p>\n

The Motor Trades Association of Australia (MTA) said there were a host of potential drawbacks to the deal.<\/p>\n

In addition to the issues raised by the watchdog, Interim Executive Director Rod Camm said the MTA was concerned about local jobs.\u00a0<\/p>\n

Loading…<\/p>\n

“Whilst there’s been some guarantees over local employment of the important staff in the RAC insurance arm, we think there’s a real risk that over time that would be consolidated back to the corporate office,” he told ABC Radio Perth.<\/p>\n

He said although the MTA raised a number of concerns in a submission earlier this year, the ACCC’s statement was largely unexpected.<\/p>\n

“In a sense this is a surprise, but it’s a really important one because the RAC insurance arm in Western Australia is already a significant component of the market, and we think it would have a significant impact.”<\/p>\n

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