Why did the ACCC move the IAG acquisition of RAC Insurance to a Phase 2 review?

The ACCC escalated the deal to a Phase 2 assessment because of concerns that the merger could "substantially lessen competition" in Western Australia.

How does the RAC Insurance deal fit into the long-term strategy for IAG (ASX:IAG)?

Acquiring RAC Insurance (RACI) is a critical component of IAG’s expansion strategy in the Western Australian market.

Why is the ACCC concerned about IAG (ASX:IAG) dominating the Western Australian market?

RACI is currently the market leader in Western Australia for both motor vehicle and home and contents insurance.

What happened with IAG’s previous attempt to buy RAC Insurance in 2025?

IAG originally applied for clearance in 2025 under the old informal merger regime, but the ACCC decided not to clear the acquisition in December 2025.

How might this regulatory delay affect the IAG (ASX:IAG) share price in the short term?

Regulatory uncertainty generally creates a "wait-and-see" approach among traders, which can lead to share price volatility or stagnation.

What is the "smash repair" concern mentioned by the ACCC?

Beyond direct insurance premiums, the ACCC is investigating how the consolidation of IAG and RACI might impact the smash repair services sector.

What are the key risks for IAG (ASX:IAG) shareholders following this news?

The primary risk is deal failure, which would stall IAG’s growth plans in Western Australia and potentially result in sunk costs from the bidding process.

Is this Phase 2 review a final rejection of the IAG and RAC Insurance merger?

No, the ACCC has not reached a final conclusion. A Phase 2 review is a more rigorous, in-depth assessment period that allows the regulator to gather more evidence and stakeholder feedback before making a definitive "yes" or "no" decision.

ACCC orders Phase 2 review of IAG acquisition

Written by Heidi Cuthbert Published Apr. 17 2026Last Updated Apr. 17 2026

The Australian Competition and Consumer Commission has escalated its scrutiny of Insurance Australia Group's (ASX:IAG) proposed acquisition of RAC Insurance, announcing that the deal now requires an in-depth Phase 2 assessment.

The regulator expressed concerns that the merger could "substantially lessen competition" within the Western Australian insurance market, where both entities are dominant players.

RACI, currently owned by the Royal Automobile Club of Western Australia, is the state's market leader in both motor vehicle and home and contents insurance.

Under the proposed deal, IAG would take over the underwriting of these products while maintaining the RAC brand.

ACCC Chair Gina Cass-Gottlieb emphasised that the acquisition would combine two of Western Australia’s largest insurers, potentially reducing consumer choice and driving up premiums.

Beyond direct insurance products, the commission is also investigating how the consolidation might impact the smash repair services sector.

IAG initially applied for clearance in 2025 under the previous informal merger regime but was blocked in December.

Following the introduction of a new formal merger regime on Jan. 1, IAG re-notified the regulator, leading to this current Phase 2 review.

The ACCC has not yet reached a final conclusion and is inviting submissions from interested parties until May 4.

For IAG—which operates major brands including NRMA, Swann, and ROLLiN’—the outcome of this review will be critical to its expansion strategy in the Western Australian market.

At the time of reporting, Insurance Australia Group’s share price was $7.41.