The Motor Trades Association of Australia (MTAA) has called on the ACCC to reject IAG's proposed remedy offer for its acquisition of RAC Insurance, saying the deal should not proceed and that the behavioural commitments on offer do not come close to addressing the structural harm the ACCC itself identified when it opposed the transaction in December 2025.
MTAA Executive Director Bruce Billson said the acquisition is part of a national pattern of consolidation that is fundamentally reshaping Australia's insurance and repair markets.
"If this deal proceeds, three motoring club insurers, RACQ, RAA and RAC Insurance, will have been absorbed by major national corporations in under 12 months," Mr Billson said.
"These were trusted, independent, member-based insurers that provided genuine competitive pressure in their state markets. One by one, they are disappearing. That is no coincidence. It is consolidation on a national scale, and it needs to stop."
Only two independent motoring-club-owned insurers remain in Australia: RAC Insurance in Western Australia and RACT Insurance in Tasmania. If the IAG acquisition proceeds, RACT would be the last one standing.
The ACCC found in December 2025 that the acquisition would give IAG 55 to 65% of WA's motor insurance market and remove the state's leading independent insurer. IAG has since re-notified under the new mandatory merger regime, and on 1 July 2026, offered a court-enforceable undertaking covering insurance product benchmarking, smash repair exclusivity and a prohibition on owning repair facilities in WA. The undertaking would last five years.
Mr Billson said the duration alone exposes the inadequacy of the offer. The exclusive Distribution Agreement that would lock IAG into the trusted RAC brand runs for 20 years.
"Five years of behavioural promises against a 20-year lock-in is not a remedy; it is a fig leaf. The undertaking offered by IAG is window-dressing for what is nothing more than a waiting game," he said.
"For the first quarter of the agreement, IAG would be on its best behaviour, while motorists thought their motoring organisation was still providing competitive insurance when the brand is actually being exploited to badge-engineer IAG policies, practices and pricing. For the remaining three-quarters, WA repairers and motorists would be on their own."
Mr Billson said the offer is entirely unacceptable with only behavioural assurances and no structural safeguards. The ACCC has stated that it has a "strong preference for structural remedies" in merger assessments and this IAG proposition has none.
"The ACCC opposed this deal and continues to oppose it because the harm is structural. If it goes ahead despite all the obvious risks and consequences that similar deals in other states have produced, the remedy should at least be structural if motorists and repairers are to have any chance to benefit from some kind of competition," he said.
"Instead, IAG is offering a complaints process it would run itself, annual benchmarking against competitors in a market it would dominate, and a set of body repair commitments that say nothing about repair pricing, payment terms, parts selection, professional autonomy or consumer steering."
Mr Billson said that when one insurer controls the majority of a state's market, the consequences for the thousands of small repair businesses that service motorists are predictable: lower rates, longer payment delays, less professional independence and less ability to serve other customers.
MTAA's submission calls for the acquisition to be rejected outright. If the ACCC approves the deal with conditions, MTAA has asked for independent oversight of complaints and monitoring, an internal code custodian within IAG whose role is to uphold the undertaking, enforceable 30-day payment terms, a repair cost variance register and protections for repairers’ professional judgment on repair methods and parts.
MTAA has renewed its call for a mandatory national Motor Vehicle Insurance and Repair Industry Code of Conduct, enforceable by the ACCC with meaningful penalties.
"A five-year undertaking on a single transaction does not fix a systemic problem," Mr Billson said.
"What repairers and motorists need is a nationally consistent, enforceable code that sets fair rules for every insurer, in every state, for the long term. Not promises with an expiry date."
ENDS
Media contact
Claire Johnson
Motor Trades Association of Australia
M: 0401 282 550
E: info@mtaa.com.au
About MTAA
The Motor Trades Association of Australia (MTAA) is the peak body representing the interests of the automotive retail sector across the nation. Through proactive engagement, MTAA helps shape sound public policy on issues that affect the retail motor trades, small businesses and consumers.
MTAA’s member associations include the Victorian and Tasmanian Automotive Chamber of Commerce, the Motor Trade Association of South Australia and Northern Territory, the Motor Trade Association of Western Australia and the Motor Trades Association of Queensland.
At the national level, MTAA acts as a unified voice, representing the interests of the automotive sector to the federal government and influencing key policy decisions. Its work includes identifying and addressing issues impacting the sector and advocating for the needs of automotive businesses through ongoing discussions with government.
