The Motor Trades Association of Australia (MTAA) has called on regulators to step in as consolidation continues to reshape the country’s motor insurance market.
In a submission to the Australian Competition and Consumer Commission (ACCC), MTAA opposed Insurance Australia Group’s (IAG) proposed acquisition of RAC Insurance in Western Australia, arguing the deal would give IAG control of up to 70% of the state’s motor insurance sector. The association said the loss of RAC Insurance as an independent operator would reduce competition, drive up premiums, and further limit motorists’ ability to choose their preferred repairer.
MTAA interim executive director Rod Camm (pictured above) said the proposal should not be viewed in isolation, noting that two other transactions had already been cleared this year: IAG’s purchase of RACQ Insurance in Queensland and Allianz’s acquisition of RAA Insurance in South Australia.
“This is not coincidence – it is a pattern. Trusted member-based insurers are being swallowed up one by one. What’s left is a market dominated by a small number of giant players, and that means higher premiums, less choice, and greater risks for consumers,” Camm said.
The association also warned that consolidation threatens the long-term viability of independent repair businesses across Australia. With fewer insurers exercising greater bargaining power, MTAA said repairers could face restrictive contracts, lower remuneration, and a shrinking customer base.
“Approving this deal risks cementing a duopoly in Australia’s motor insurance market. Motorists in WA, Queensland, South Australia and beyond will all feel the impact in the form of higher costs, less transparency, and reduced competition,” Camm said.
To address these concerns, MTAA has renewed its call for a mandatory national Motor Vehicle Insurance and Repair Industry Code of Conduct. It said the code would protect consumers, provide fair treatment for repairers, and set clear standards for insurer behaviour in a market increasingly concentrated in the hands of a few players.
“The ACCC must consider the bigger picture, not just each acquisition in isolation. Without stronger regulation, these deals will continue until there is no real competition left. Motorists deserve better,” Camm said.
MTAA’s submission on the IAG-RAC Insurance proposal is available on its website.
