Why Insurance Australia Group shares are sliding today

Insurance Australia Group's stock dropped 1.5% to A$7.95 on Wednesday after Australia's competition regulator formally blocked its proposed A$1.35 billion takeover of RAC Insurance Pty Limited.

After a detailed Phase 2 review, the Australian Competition and Consumer Commission determined the deal would substantially reduce competition in Western Australia's motor vehicle and home insurance sectors.

The ACCC found that a merged IAG-RACI business would hold about 55% to 65% of WA's motor insurance market and 50% to 60% of home and contents, a concentration it said was incompatible with preserving competitive pricing and service quality for consumers.

IAG CEO Nick Hawkins publicly contested the ruling and said the company would immediately file a public benefit application, the next step available under the formal merger control system that began in January 2026, keeping the deal alive while prolonging uncertainty.

The broader Australian market offered little support for IAG, with the ASX 200 trading narrowly.

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