IAG acquires 90% of RACQ Insurance in $855m deal

The deal is expected to add $1.3b to IAG’s gross written premiums.

IAG and RACQ have announced a 25-year partnership to deliver general insurance products to RACQ members and Queensland residents. 

Under the deal, IAG will acquire 90% of RACQ's insurance underwriting business for $855m, with the option to purchase the remaining 10% in two years under the same terms.

The $855m consideration includes $522m for the net tangible asset value of RACQ’s insurance business and $333m as an upfront payment for the exclusive distribution agreement. 

The deal is expected to add $1.3b to IAG’s gross written premiums upon completion, which is anticipated in the third quarter of 2025, pending regulatory approvals.

IAG plans to fund the acquisition through surplus capital and expects the transaction to be earnings-per-share accretive in the first full year of ownership. 

Additionally, synergies from adopting IAG's reinsurance strategy for the RACQ portfolio are projected to exceed $50m annually.

The alliance will not alter IAG's or RACQ’s existing brands and operations in Queensland.

Integration costs of approximately $70m will be incurred over two years, including capitalised software expenses. 

Regulatory clearance from the Australian Competition and Consumer Commission and approval under the Financial Sector (Shareholdings) Act 1998 are required to finalise the deal.