IAG Offers NRMA WA Policy Sale to Win RAC Alliance Approval

IAG (ASX:IAG) has offered the ACCC remedies and commitments, including selling its NRMA Insurance Western Australian renewal rights, as it seeks a determination that its proposed alliance with RAC should be allowed because it will result in a net public benefit.

The commitments include transferring renewal rights for active NRMA Insurance home and motor policies in Western Australia to another insurer through a sale process; addressing the availability of RAC home insurance north of the 26th parallel in mainland Western Australia, including Karratha, Port Hedland and Broome; investing $20m in community resilience initiatives in the state over the next decade; and stronger measures if IAG breaches requirements on pricing and competitiveness of the RAC-branded offering. IAG says the net impact of the alliance and the NRMA policy transfer is an additional $1.2bn in annual gross written premium, and that the remedies do not alter the transaction's strategic or financial rationale. It still expects the deal to be EPS accretive in the first full year of ownership and mid-single digit EPS accretive on a full synergy run-rate basis, with $15m to $25m in annual integration costs over three years and approximately $100m in annual pre-tax synergies once integration is complete.

The measures depend on the alliance being approved and completed. The public benefits phase is expected to be completed in December 2026, subject to any extensions, and the release does not name a buyer for the renewal rights.