The Australian Competition and Consumer Commission has delayed its blockbuster decision on Insurance Australia Group's $1.35 billion acquisition of RAC Insurance until December 11, giving the parties two more weeks to submit additional information as the regulator grapples with serious competition concerns.
The postponement, revealed on the ACCC's website, suggests the regulator is still weighing whether the deal would substantially lessen competition in Western Australia's home and motor insurance markets—where RAC currently dominates with 55 per cent of the motor insurance market and as much as 35 per cent of home and contents coverage.
The delay marks the second major setback for the proposed transaction since it was announced more than six months ago. In September, the ACCC issued a "statement of concerns" warning that the acquisition would likely give IAG control of between 60 per cent and 70 per cent of WA's motor insurance market and 50 per cent to 60 per cent of its home and contents insurance—a concentration level the regulator deemed potentially harmful to consumers and competitors.
The regulator flagged concerns that such market dominance would enable IAG to "profitably increase the prices and/or reduce the service quality" of its insurance products while wielding unprecedented influence over WA's repair services sector, potentially limiting access for rival insurers.
The timing proves particularly ironic given that RAC Insurance has become a profit powerhouse for its parent company. The insurer delivered a record net profit contribution of $254.2 million in the 2025 financial year, with insurance revenue jumping 21 per cent on the back of average premium increases of 9.3 per cent—demonstrating the business's inherent value and competitiveness in the WA market.
Under the proposed agreement, RAC would receive $400 million from the outright sale of its insurance business to IAG, with an additional $950 million payable over 20 years through a branded insurance partnership arrangement.
RAC has publicly maintained confidence in the deal, but the extended ACCC review period suggests negotiations may intensify in the coming weeks as both parties seek to address the regulator's core objections to the transaction.
