Proposed alliance threatens future of independent motoring club insurance

The Motor Trades Association of Australia (MTAA) has condemned Insurance Australia Group’s (IAG) proposed strategic alliance with RAC WA, warning that this move—alongside proposed acquisitions of RACQ and RAA Insurance—marks the beginning of the end for locally owned, motoring club-based insurance in Australia.

If approved by the Australian Competition and Consumer Commission (ACCC), the proposed acquisitions of RACQ and RAC WA by IAG—alongside Allianz’s bid for RAA Insurance—would hand control of three state-based insurers to two corporate giants.

This would erode the independence and community-focused ethos of motoring clubs that have long prioritised the interests of Australian motorists, and significantly impact on the backbone of Australia’s small and medium repairs, who would be at the mercy of massive corporate insurers. .

“It’s a sad day for Australian businesses and motorists,” said MTAA Interim Executive Director Rod Camm. “These trusted motoring clubs have long stood apart from the major insurers by prioritising members and quality service. If these deals are approved in Queensland, South Australia and now Western Australia, it will be the nail in the coffin for local motoring club insurance.”

“The agreements could mislead consumers into thinking they were still insured by a local motoring club, IAG’s announcement it will deliver insurance for RACW pulls the wool over the eyes of Western Australians for the next 20 years” Camm said.

MTAA is calling on the ACCC to reject these proposals and instead focus on strengthening competition and regulatory oversight in the insurance sector. Without urgent intervention, MTAA warns motorists will face:

• Less choice and higher premiums
• Increased pressure on small and independent repairers
• Declining service standards and diminished consumer protections

MTAA continues to advocate for real changes to  the Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct, including real penalties and ACCC involvement in governance.

“The ACCC must act now to preserve competition and prevent irreversible damage to Australia’s insurance and repair ecosystem,” Mr Camm said.”

MTAA’s full submission to the ACCC on IAG’s proposed acquisition of RACQ and Allianz’s proposed acquisition of RAA can be accessed here.