RAC has announced it will enter into a 20-year general insurance partnership with IAG, which will see IAG acquire 100% of RAC’s insurance underwriting business as part of the transaction.
What’s happening?
RAC has announced it will enter into a 20-year general insurance partnership with IAG. This will see IAG acquire and manage 100% of RAC’s insurance underwriting business as part of the transaction.
RAC will continue to distribute general insurance products under the RAC Insurance brand through our existing channels, while IAG will take on underwriting, claims management, product development and pricing.
Importantly, a significant claims presence will be maintained in Western Australia – this includes claims handling capability
Following completion of the transaction, RAC members will continue to have access to leading insurance products.
What you need to know:
- No immediate changes to your policy: There are no changes to RAC branded insurance products as a result of this announcement.
- No changes to active claims. There are no changes to any claims you are currently working through with RAC.
- RAC will still handle claims in WA. There will still be a significant claims presence in WA.
- Updated documentation: Following completion of the transaction, members will receive updated product disclosure statements reflecting IAG as their new underwriter.
Why has RAC done this?
- Firstly, to be able to better serve our members. We want to continue serving our members and the WA community. This announcement is a move to position RAC for continued success for decades to come.
- Secondly, to adapt to the evolving regulatory environment. Over the past several years, RAC’s Insurance business has been responding to an increasingly complex regulatory environment, higher claims volumes and expenses, and rising reinsurance costs, along with a requirement to hold larger capital reserves for claims and natural disasters.
Why IAG?
- Access to insurance capabilities. IAG is one of Australia’s leading general insurers. IAG has the experience to support RAC in the supply of competitive insurance, and an excellent claims experience for all our members.
- Continue service excellence. IAG brings industry expertise and has a clear track record in delivering an excellent member experience, with this partnership allowing us, post-completion, to continue providing competitive insurance products and an excellent claims experience.
- Investment in the WA community. We can continue to invest in and expand our RAC member products and services, advocacy efforts and community initiatives.
Frequently asked questions
The agreement has resulted from detailed discussions and was announced to members and the general public on Thursday 15 May 2025.
Following transaction completion, IAG would acquire and manage 100% of our underwriting business. This means we would continue to distribute insurance under the RAC Insurance brand through our existing channels, while IAG would take on underwriting, claims management, product development and pricing.
No. The transaction is primarily focused on home and motor insurance products and excludes insurance products offered by RAC Group entities other than RAC Insurance.
For example, RAC Travel will continue to sell RAC Travel Insurance, underwritten by their insurance partner Tokio Marine.
An insurance underwriter is a company that assesses and takes on the risk of insuring people or assets.
When an insurance product is sold by one company but underwritten by another, it means that the underwriting company is responsible for evaluating the risk and providing the financial backing for the policy, while the selling company handles the customer relationship and policy administration.
This allows the selling company to offer insurance products without bearing the full risk.
The first thing to know is that today’s announcement is the first step. Implementation of the partnership remains subject to regulatory approvals and subsequent transition and implementation activities between RAC and IAG.
IAG is one of Australia’s leading general insurers. IAG has leading insurance capabilities, a shared ethos and cultural alignment and a clear track record in delivering an excellent member experience and competitive product offering.
Upon completion of the transaction, IAG has the experience to support RAC as we continue to provide competitive insurance, and an excellent claims experience for all our members.
This would enable RAC to continue to invest in and expand our member products and services, our advocacy efforts, and our ongoing community initiatives.
RAC people would gain access to enhanced capabilities and opportunities to enable us to deliver exceptional value to our members.
We would also be well-placed to keep pace with industry advancements and maintain our commitment to excellence.
The transaction is subject to regulatory approvals.
At this stage we don’t have a definitive answer on how long the transition will take to complete.
There are still regulatory approvals to be finalised, and a transition process for the business.
How that transition is structured and how it would be implemented will be worked through as we work towards completion. Subject to regulatory approvals, the transaction is expected to complete in the first half of the calendar year 2026.
No. There have been no decisions to make changes to any of our member facing sites as part of this transaction.
Yes. This partnership will enable RAC to continue to invest in and expand our member products and services, our advocacy efforts, and our ongoing community initiatives.
There is no immediate change to your current policy. Members will continue to be supported by our local claims experts and the RAC team.
At this stage there is no change to your membership tenure.
There are no changes to member insurance policies and RAC branded insurance products as a result of this announcement – with the exception that RAC Insurance policies will be underwritten by IAG following execution of the partnership.
Your premium is calculated based on various factors such as changes in your personal circumstances, your driving record, the value of your insured property, your claims history or market conditions.
There is no change to your current policy.
IAG has committed to maintaining a significant claims presence in Western Australia – this includes claims handling capability.
There are no immediate changes to members having access to the RAC Member Benefits Program as a result of this announcement.
