The Motor Trades Association of Australia (MTAA) welcomes the Australian Competition and Consumer Commission’s (ACCC) decision to oppose Insurance Australia Group’s (IAG) proposed acquisition of RAC Insurance (RACI), reinforcing the importance of competition in the motor vehicle insurance market.
The ACCC found that the acquisition would be likely to substantially lessen competition in the supply of motor vehicle insurance and home and contents insurance in Western Australia. RACI is the market leader in both categories, and the acquisition would have given IAG an estimated 55 to 65 per cent share of the Western Australian motor vehicle insurance market.
MTAA Executive Director Bruce Billson said the decision recognises concerns MTAA and its members have consistently raised about further concentration in the insurance market.
“This is the second time the ACCC has declined to clear this acquisition, and we commend the regulator for standing firm on the importance of genuine competition,” Mr Billson said.
“The remedy offered by IAG was not sufficient to address the legitimate industry and regulator competition concerns. Behavioural commitments are no substitute for the competitive discipline that comes from having strong and independent participants in the market.”
MTAA said the decision was also significant for the thousands of independent automotive repair businesses operating across Western Australia.
MTAA has consistently raised concerns about the impact of increasing insurer concentration on the balance of bargaining power between insurers and independent repairers, including its potential implications for sustainable repair rates, business viability and consumer choice.
“Motorists and repairers alike benefit from a competitive insurance market. Preserving meaningful competition is important for consumer choice and for a sustainable, independent repair sector,” Mr Billson said.
ENDS
Media contact Claire Johnson
Motor Trades Association of Australia
M: 0401 282 550
E: info@mtaa.com.au
