ACCC raises concerns over IAG’s $1.35bn deal for RAC’s insurance arm
If the insurer IAG’s purchase of RAC’s insurance business of $ 1.35 billion is completed, the competition observer marked concerns about higher premium potential.
The Australian Competition and the Consumer Commission expressed his concerns about the two large engine and home insurance provider, which came together in what the guard dog has already described as an intense market.
ACC is concerned that the decrease in competition can increase IAG’s premiums and it can reduce the quality of its own and Raci’s engine insurance and home and content insurance products in the future, ”he said.
In addition, the proposed agreement has increased the concerns that IAG could potentially limit IGAG’s access to quality and cost -effective repairers in WA, or even increase the costs of acquiring repair services in the state.
Sydney -based Insurance Australia Group (IAG) announced in May to purchase $ 1.35 billion to buy both RAC WA and Racq’s insurance business.
IAG’s agreement for RAC Business includes $ 400 million for RAC insurance and $ 950 million for a 20 -year distribution and brand licensing agreement.
With the purchase of RACQ, he said that the two agreements were overthrown to increase the insurance profit at least $ 300 million ”.
IAG is already an important player in Western Australia after purchasing the insurer SGIO of the former state government in 2000.
“Raci is the leading provider of both engine and home and content insurance in Western Australia and has a significant market share in each of them compared to other insurance companies.
“Raci competes strongly in Western Australia with its well -known brand and customer service. In addition, it seems that if the proposed acquisition is not realized, it will continue to compete strongly in the future.”
“We are worried that purchasing will increase concentration in a already concentrated market, D said Dr Williams, Dr Williams said.
The anxiety of the ACC claims that after the Motor Trade Association calls to prevent the inheritance, it will further strengthen the sovereignty of great insurers ”and that consumers, drivers and repairers will reduce the competition to the harm.
The industrial organ said, “If the Australian Competition and Consumer Commission is approved by the Australian Commission, Racq and Rac Wa’s proposed by IAG will be checked by the two companies of the bid-three state-based insurance company for RAA insurance”.
The competition guard dog is currently looking for a presentation in response to the subject statement until September 18th.
