Insurance giant Insurance Australia Group (IAG) has taken control of RACQ Insurance, cementing a partnership both companies say will strengthen services for Queenslanders while combining the scale of a national operator with the legacy of one of the state’s most recognisable brands.
The closure of the deal, announced this week, sees IAG assume responsibility for RACQ Insurance’s claims, products and pricing, while the RACQ brand and member-facing services will remain in place. Employees of RACQ Insurance have transitioned to IAG but continue to operate from the insurer’s Eight Mile Plains head office.
The deal, originally announced in May, sees IAG take over 90% of RACQ’s insurance business in a deal worth around $855 million. The move is expected to add roughly $1.3 billion in gross written premium to IAG’s portfolio.
Just months later, IAG announced a second major deal – the purchase of RAC Insurance, the insurance business of the Royal Automobile Club of Western Australia. Valued at $1.35 billion, the agreement includes $400 million for the insurance arm and $950 million for exclusive branding and distribution rights over 20 years. IAG expects the acquisition to be earnings-accretive from the first year, delivering $100 million in operational synergies.
These acquisitions followed positive financial results for IAG in the fiscal year ending June 2025. The trans-Tasman insurance giant reported an insurance profit of $1.74 billion, a jump of more than 21%. Net profit after tax (NPAT) was up by more than 50% to $1.36 billion. IAG’s new partnerships with RACQ and RAC WA are projected to add around $3 billion in gross written premium and at least $300 million in incremental profit, though these figures are not reflected in its 2025–26 guidance
RACQ Insurance, founded in 1971 as part of the Royal Automobile Club of Queensland, has grown into one of the state’s most prominent insurers. Its reputation has been built on assisting members through decades of natural disasters, from floods and cyclones to bushfires. The insurer has become a household name in Queensland.
Under the new arrangement, RACQ will continue to support policyholders through its locally based retail stores and contact centres, preserving the organisation’s familiar presence across the state.
IAG is Australia’s largest general insurer, with a portfolio of well-known brands including NRMA Insurance, CGU, SGIO, SGIC and WFI. It also has stakes in New Zealand through State, AMI and NZI. The group provides cover for millions of motorists, households and small businesses and has steadily expanded through acquisitions and partnerships across Australasia.
Chief executive Nick Hawkins said RACQ members would soon benefit from “IAG’s best-in-class technology for claims.”
The transaction continues IAG’s strategy of using its scale and technological investments to bolster service levels across regional markets.
For Queenslanders, the arrangement means that while the RACQ brand remains in place, their insurance will now sit under the umbrella of Australia’s largest insurer, potentially giving them access to a broader suite of products and digital services.
The partnership underscores a wider shift in the insurance sector, where scale and advanced technology are becoming crucial to managing rising natural disaster costs and meeting growing customer expectations.
At a glance: IAG and RACQ Insurance
