What’s happening?
- In May, RAC announced our intention to enter into a 20-year general insurance partnership with IAG, which will see IAG acquire and manage 100% of RAC’s insurance underwriting business as part of the proposed partnership.
- On 11 December, the Australian Competition and Consumer Commission (ACCC) announced it will oppose IAG’s proposed acquisition of the RAC Insurance business and the insurance partnership between RAC and IAG.
- On the 3 March 2026 IAG has now submitted a new application for the partnership under the ACCC’s new merger control regime. RAC is aligned with IAG on this decision.
- On 17 April 2026, the Australian Competition and Consumer Commission (ACCC) announced its plan to undertake a Phase 2 assessment of the proposed partnership with IAG. We respect the ACCC process and will continue to work with them throughout their assessment. RAC remains confident in the merits of the partnership, which will ensure we can continue to offer competitive, reliable and high-quality insurance for current and future generations of members.
Why is RAC doing this?
RAC has explored the proposed insurance partnership with IAG because the insurance environment has fundamentally changed. The decision is grounded in three core factors:
- Regulation
- Insurance regulation has become significantly more complex.
- Insurers are required to meet higher regulatory standards and hold significant capital to protect members against large or unexpected claims.
- These requirements continue to increase, placing greater pressure on smaller, local insurers – such as RAC.
- Risk
- RAC insures exclusively in Western Australia.
- RAC currently insures close to $270 billion worth of home and motor risk, with most of that concentrated heavily in Perth.
- This creates geographic concentration risk - meaning a single major event would affect a large proportion of our members at the same time.
- By contrast, a national insurer like Insurance Australia Group (IAG) can spread risk across the country. A severe weather event in one state does not affect all customers at once, allowing risk to be balanced more effectively.
- Capability
- As a single-state insurer, there are limits to the scale and capability RAC can build on its own.
- Larger insurers are able to invest heavily in technology, systems and resilience.
- For example, as a national insurer, IAG has the size and scale to invest significantly more into technology, strengthening systems, claims capability and resilience.
- Partnering provides access to expertise and scale that is increasingly difficult to replicate independently.
- While RAC has continually fine-tuned and improved our insurance business, we believe the environment has now shifted to a point where partnering is in the best interest of our members and our people.
- This partnership would allow RAC to stay focused on our members and our work in the community, while ensuring insurance remains strong, sustainable and resilient for the future.
- We are not getting out of insurance, we would simply be changing the way it is delivered.
- Our role is to make responsible decisions that ensure RAC remains strong and sustainable for decades to come - and that’s exactly what this partnership is about.
Read the Horizons interview with Rob Slocombe, or listen to the RAC podcast.
How will this benefit members?
- Protecting members from growing risk. By partnering with a larger insurer, RAC can reduce the amount of risk it carries alone, helping to protect members against increasing claims volatility driven by extreme weather and rising costs.
- Focus on members. RAC can stay focused on members, the WA community, and the RAC brand, while insurance risk sits with an underwriter.
- Strong local presence, backed by national capability. Members would continue to access local call centres, branches and WA-based claims support, while benefiting from deeper insurance capability and resilience at a national scale.
- Ongoing investment in what matters to members - and to WA. By reducing the amount of capital RAC needs to hold to manage insurance risk, the partnership would allow us to continue investing in improved and expanded member products and services. Our focus on advocacy, social and community initiatives will also continue - supporting our purpose of making life better for Western Australians.
- Long-term sustainability. Most importantly, this proposal is about ensuring RAC can continue to offer strong, competitive and reliable insurance - not just today, but for future generations of members.
What would change for members?
- An updated Product Disclosure Statement (PDS). If the partnership proceeds, RAC members with insurance policies would receive a new PDS that lists IAG as their insurance underwriter.
- The insurance product would still be RAC-branded.
- RAC local service would remain. Members would continue to deal with RAC and RAC people when calling or visiting branches.
- IAG would also continue to maintain a significant claims handling presence here in Western Australia.
Why IAG?
- IAG has leading insurance capabilities, a clear track record in delivering an excellent member experience and competitive product offering.
- IAG brings industry expertise with this partnership allowing us, post-completion, to continue providing competitive insurance products.
- 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.
Frequently asked questions
We are not getting out of insurance, we would simply be changing the way it is delivered.
Under the proposed partnership, we would continue to sell insurance products under the RAC Insurance brand, while IAG would take on underwriting, claims management, product development and pricing.
RAC members would still have an RAC-branded insurance policy; but on their Product Disclosure Statement, IAG would be listed as the insurance underwriter.
The ACCC will introduce a new mandatory merger control regime from 1 January 2026. This brings changes to how ACCC assesses applications.
We still believe the proposed partnership has merit and would deliver enhanced value to members and support our people through access to IAG’s leading insurance capabilities, technology, and expertise. The initial application was made under the previous ACCC regime (pre-2026). That previous regime has now ceased, and options to progress under that regime have closed. This means the proposed partnership must now seek approval under the new regime, which covers transactions to be completed after 1 January 2026, including those reviewed but not cleared by the ACCC under the previous regime.
The first step in this process is IAG’s lodgement of the application with the ACCC under its new regime. From there, we will keep you updated on any developments as appropriate.
This new assessment is expected to take several months. The ACCC process has fixed statutory timeframes of 30 business days for a phase 1 review (an initial assessment) and 90 business days for a phase 2 review (a deeper review if/when more consideration is required.) These timeframes can be extended in some circumstances.
There is no immediate change. RAC and IAG will continue to operate as separate businesses. We will keep our members informed as the process continues.
The agreement has resulted from detailed discussions and was announced to members and the general public on Thursday 15 May 2025.
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.
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.
No. There have been no decisions to make changes to any of our member facing sites as part of this transaction.
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.
Yes. You will continue to hold an RAC-branded policy. Once the partnership transition is complete, IAG will be the underwriter.
There are no immediate changes to members having access to the RAC Member Benefits Program as a result of this announcement.
The Australian Competition and Consumer Commission (ACCC) is Australia’s competition regulator. Its role is to protect the interests and safety of consumers, and support fair trading in markets affecting consumers and small business.
Yes, RAC will continue to be based in WA to serve its WA members on all of our products and services, including roadside assistance. In entering this partnership, IAG is making a commitment to retaining a significant local presence in WA, ensuring RAC members have access to local expertise and market-leading contact centres.
RAC and IAG have agreed to form a partnership however this is still subject to regulatory approvals. There are no immediate changes to RAC branded products as a result of this announcement. Your premium is calculated due to factors such as changes in your personal circumstances, your driving record, the value of your insured property, your claims history or market conditions. We can always look at your policy at any point and conduct a health check to make sure we are checking the risk details and coverage to make sure they are correct and you are paying for what you need.
RAC operates a significant number of businesses outside of Insurance including our membership, breakdown products, travel, auto-services, batteries, tyres, parks & resorts and Finance. These remain unchanged.