The Motor Trades Association of Australia (MTAA) has raised concerns about the long-term implications of Insurance Australia Group’s (IAG) proposed arrangement with RAC WA.
It argued that the deal could shift underwriting control of the motoring club’s insurance operations to a major insurer for the next 20 years.
The MTAA is warning that such developments may signal a broader move away from community-based insurance models traditionally operated by member-owned motoring clubs.
If approved by the Australian Competition and Consumer Commission (ACCC), the IAG-RAC WA deal – alongside IAG’s proposed acquisition of RACQ and Allianz’s bid for RAA Insurance – would result in three state-focused insurers falling under the control of two large insurance groups.
MTAA interim executive director Rod Camm (pictured) said these transactions may affect consumer clarity and market competition.
“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,” he said.
He added that the change in underwriting could be misleading.
“The agreements could mislead consumers into thinking they were still insured by a local motoring club. IAG’s announcement [that] it will deliver insurance for RAC WA pulls the wool over the eyes of Western Australians for the next 20 years,” Camm said.
MTAA has called on the Australian Competition and Consumer Commission (ACCC) to block the deals and instead focus on regulatory measures that promote competitive dynamics and protect smaller market participants.
It argued that consolidation could:
“The ACCC must act now to preserve competition and prevent irreversible damage to Australia’s insurance and repair ecosystem,” Camm said.
In parallel, MTAA continues to advocate for updates to the Motor Vehicle Insurance and Repair Industry (MVIRI) Code of Conduct. Among its key proposals are stronger regulatory oversight and enforceable penalties to uphold standards within the repair and insurance sectors.
The Code Administration Committee (CAC), which oversees the MVIRI Code, has extended its public consultation period to June 23 in response to stakeholder feedback. The committee is composed of representatives from both the Insurance Council of Australia (ICA) and MTAA.
Key updates in the draft include proposed changes to estimating guidelines, dispute resolution procedures, and disciplinary systems. The CAC is also considering incorporating itself as a formal legal entity to enhance accountability.
