RACQ Insurance’s challenges in disaster-prone Queensland have paved the way for its sale to a rival company.
The Australian Competition and Consumer Commission (ACCC) today (May 22) announced it would not oppose Insurance Australia Group Limited’s (IAG) proposed acquisition of RACQ Insurance Limited (RACQI).
ACCC Chair Gina Cass-Gottlieb said IAG and RACQI supplied general insurance products, including home and contents insurance and motor insurance.
She said they predominantly overlapped in the supply of insurance products in Queensland.
“RACQI faces material challenges in continuing to provide competitive insurance due to it serving some areas of higher natural hazard risk, and limited access to capital as a mutual organisation.
“These challenges have placed limitations on its capacity to compete.”
Ms Cass-Gottlieb said the ACCC’s review considered the impact of the proposed acquisition on the supply insurance.
She said alternative suppliers of home and contents insurance and motor insurance would continue to compete with and provide a competitive constraint on IAG after the acquisition.
“Several alternative suppliers, including the market leader Suncorp, more established insurers Allianz and QBE, and newer entrants such as Youi, Auto & General, and Hollard will continue to compete in Queensland.”
