RAC has today announced it will enter into a 20-year general insurance partnership with IAG. As part of the transaction, IAG will acquire and manage 100% of RAC’s insurance underwriting business.
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.
The decision has been made in response to an increasingly complex and evolving 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.
IAG has leading insurance capabilities and a clear track record in delivering an excellent member experience and competitive product offering.
IAG has the experience to support RAC in the supply of competitive insurance, and an excellent claims experience for all our members. Furthermore, IAG has committed to retaining RAC Insurance’s talented employees in WA, ensuring RAC members have access to local expertise and market-leading contact centres, while continuing to invest in RAC’s technological initiatives.
Commenting on the partnership RAC Group CEO Rob Slocombe said:
“RAC is excited to enter into this partnership with IAG, to ensure our 1.3 million members continue to have access to the important and quality insurance coverage they rely on. IAG brings a meaningful understanding of member-focused organisations.
They have the experience needed to manage increasing volatility and improve the insurance products and services we provide. This will also enable us to continue to invest in member services, advocacy and community initiatives.
As a result of this partnership with IAG, we will continue to work together to ensure all RAC members have access to leading insurance products and an excellent claims experience."
IAG Managing Director and CEO, Nick Hawkins said:
“We are thrilled to partner with RAC, the leading insurance business here in WA. Our commitment to delivering exceptional value and care to WA members, along with a strong cultural alignment is at the heart of this transaction. We were drawn to partner with RAC due to their historical strong performance, platform for growth, and strong market presence in the insurance market in Western Australia. We welcome RAC’s people and members into this partnership.”
Transaction highlights and key terms of the agreement:
- Consideration payment of $1,350 million. The consideration comprises $400 million for 100% acquisition of RAC Insurance and $950 million for a distribution and brand licencing agreement.
- This announcement only relates to RAC’s Insurance business. It does not include other member services provided by RAC.
- IAG has committed to retaining RAC Insurance’s talented employees in WA, ensuring RAC members have access to local expertise, market-leading contact centres, and continuing to invest in RAC’s technological initiatives.
The transaction is subject to regulatory approvals. Subject to approvals, it is expected that the transaction will complete in the first half of calendar year 2026.
ENDS
Media contact:
Russell Quinn, Sodali & Co – 0403 322 097 russell.quinn@sodali.com
RAC media team – 0401 703 719 media@rac.com.au
