Australia’s competition regulator, the Australian Competition and Consumer Commission (ACCC), announced it will not oppose the proposed acquisition of the Royal Automobile Association of South Australia’s (RAAI) personal lines insurance business by Allianz Australia Insurance.
The ACCC concluded that the deal is unlikely to significantly reduce competition in South Australia’s insurance market due to the presence of several other effective competitors.
According to the ACCC, Allianz and RAAI both offer home, contents, and motor insurance products in South Australia.
The review focused on how closely Allianz and RAAI compete, the competitiveness of other insurers, and RAAI’s current and projected future competitiveness without the acquisition.
The Commission also evaluated how the deal might affect insurance pricing, coverage, and service levels.
Commissioner Philip Williams stated that Suncorp Group and Insurance Australia Group (IAG) remain the two largest insurers in the country and retain a strong presence in South Australia.
They are expected to continue competing effectively against Allianz even after the acquisition. Williams also pointed to mid-tier insurers Auto & General (which operates Budget Direct) and Youi, both of which are growing their national market share and maintain price competition in the state.
Our investigation focused on the closeness of competition between RAAI and Allianz and the extent to which other insurers are competing effectively to supply insurance to South Australians
ACCC Commissioner Philip Williams
“We also considered how competitive RAAI is now and is likely to be in the future without being acquired by Allianz. The likely impact of the acquisition on insurance prices, coverage and service offerings were all carefully consideredthe extent to which other insurers are competing effectively to supply insurance to South Australians,” said Philip Williams.
Despite RAAI’s strong brand recognition through its motoring club and membership base, Williams said pricing and coverage competition in South Australia is primarily driven by insurers such as Suncorp (via its AAMI brand), IAG, Auto & General, and Youi.
The ACCC’s review also addressed specific challenges facing RAAI, including the increasing frequency of extreme weather events and rising reinsurance and regulatory costs, which are impacting its competitiveness.
The Commission found that RAAI is likely to be less competitive in the future compared to previous years.
The investigation further examined whether the proposed deal would affect related service markets in South Australia—namely smash repair, windscreen repair and replacement, and building repair services.
The ACCC concluded that Allianz is unlikely to reduce prices or alter supply terms in these sectors following the acquisition, given its relative position in the market compared to other insurance buyers.
Separately, the ACCC noted that it is conducting a separate review of IAG’s proposed acquisition of RAC Insurance from the Royal Automobile Club of Western Australia.
It clarified that the outcome of the Allianz–RAAI matter does not indicate the likely decision in the IAG–RAC Insurance case, as each transaction is being assessed on its own competitive conditions and risks.
