A Bloomberg report stated that both insurers are reviewing a possible acquisition of RAC WA’s insurance operations. The Australian Financial Review previously reported that RAC WA had enlisted investment bank Barrenjoey to conduct a strategic review of its insurance business.
A spokesperson for RAC WA confirmed the ongoing review but did not comment on potential bidders.
“RAC is constantly looking for ways to improve our member experience and the services we provide, including insurance,” the spokesperson said, as reported by Bloomberg.
IAG, when asked, stated that it regularly assesses growth opportunities and is positioned for expansion but declined to discuss market speculation. Allianz also declined to comment.
The potential sale comes amid increased consolidation efforts within the insurance sector, with major insurers acquiring businesses tied to mutual lenders and state-based automobile associations to strengthen their market position.
The interest from Allianz and IAG follows similar deals in the sector. In late 2024, IAG agreed to acquire 90% of the Royal Automobile Club of Queensland’s (RACQ) insurance underwriting business, with an option to purchase the remaining 10% within two years. That transaction also included a 25-year distribution partnership.
Allianz, meanwhile, secured a deal with the Royal Automobile Association of South Australia (RAA) to acquire its general insurance business and entered a 20-year exclusive distribution agreement. For the insurance giant, another acquisition in Australia could strengthen its market presence after experiencing regulatory setbacks in Singapore and India.
The potential sale of RAC WA’s insurance business aligns with broader trends in consumer insurance preferences.
A recent study commissioned by the Council of Australian Life Insurers (CALI) found that Australians are significantly more likely to insure their vehicles than to take out life insurance policies.
The survey, which collected responses from over 5,000 working Australians, showed that 79% have car insurance, while only 34% hold life insurance. The findings suggest that access to financial advice may play a role in the disparity, as many individuals remain underinsured when it comes to income protection.
Insurance coverage varied across age groups:
The data highlighted a tendency for older Australians to prioritise asset protection, with motor and home insurance being the most common forms of coverage. Life insurance remains comparatively lower across all demographics.
As financial pressures persist, life insurance is often among the first policies individuals consider reducing. The respondents were three times more likely to forgo life insurance than car or home insurance.
