CGUA licence approval clears path for IAG transfer

Insurance Australia Group (IAG) has received approval from the Federal Court of Australia to shift its Intermediated Insurance Australia (IIA) portfolio from Insurance Australia Limited (IAL) to a newly established subsidiary, CGU Australia Pty Ltd (CGUA).

The transfer, which takes effect on Oct. 1, will see the CGU and WFI Insurance brands move under CGUA’s licence.

IAG confirmed that the change will not alter existing policies or claims handling, nor will it affect dispute resolution, communications, or broker processes.

Jarrod Hill, chief executive of CGU and WFI Insurance, said the restructure would give the business additional flexibility.

“Operating under an independent insurance licence strategically positions CGU and WFI for future growth and will enable us to manage capital more flexibly, improve our competitive agility, and better service the unique needs of our brokers, distribution partners, and customers,” he said.

Hill also noted that stakeholders had been briefed ahead of the change.

“I would like to acknowledge and thank our broking partners for their continued cooperation and support throughout this process,” Hill said.

Completion of RACQ Insurance acquisition

The licence decision coincided with IAG’s announcement that it has formally closed its acquisition of RACQ Insurance.

The deal, valued at about $855 million and first disclosed in May, gives IAG a 90% interest in the Queensland-based insurer.

The transaction is expected to lift IAG’s gross written premium by roughly $1.3 billion.

Under the arrangement, IAG has assumed responsibility for products, pricing and claims operations, while the RACQ brand and customer-facing services will remain unchanged. Staff have transferred to IAG but continue to work from RACQ Insurance’s Eight Mile Plains head office.

Nick Hawkins, IAG’s group chief executive, said the integration will provide RACQ members with access to enhanced digital and claims capabilities.

RAC WA transaction expands national footprint

The RACQ acquisition follows IAG’s agreement to acquire RAC Insurance in Western Australia for $1.35 billion.

The deal, which includes $400 million for the insurance business and $950 million for exclusive branding and distribution rights over 20 years, is expected to generate around $100 million in annual synergies and contribute to earnings in its first year.

Together, the RACQ and RAC WA acquisitions are forecast to add close to $3 billion in gross written premium and deliver at least $300 million in incremental profit once fully integrated.