IAG to purchase insurance business of RAC
IAG will enter a strategic alliance with The Royal Automobile Club of Western Australia to provide general insurance products and services for RAC members and Western Australians.
The transaction includes IAG’s purchase of the RAC Insurance business and a 20-year exclusive distribution agreement for RAC branded home, motor and niche insurance products. The consideration comprises $400 million for 100% acquisition of RACI and $950 million for a distribution and brand licensing agreement.
The transaction will be funded from IAG’s existing surplus capital, debt and organic capital generation.
“RAC is pleased to partner with IAG, a leading Australian general insurance company, in a long-term partnership that will strengthen the value we deliver to our 1.3 million members across Western Australia. IAG brings national scale, global reinsurance capability and industry-leading technology to support RAC members, along with a deep understanding of member focused organizations. The partnership will contribute to our organization’s purpose, vision and mission of being the driving force for a better Western Australia, providing a safer, sustainable and connected future. The partnership will support RAC to deliver for our members, employees, and all Western Australians through continued access to innovative insurance products and services provided locally under the RAC brand, to safeguard their future for years to come.” – RAC Group CEO Rob Slocombe.
“We’re excited to partner with RAC to help protect and serve more Western Australians. RAC is a highly trusted institution with a quality insurance business and strong member relationships. This partnership lays a solid foundation for continued commitment to Western Australia, the nation’s top performing economy. Our alliance with RAC will draw on our proven track record with successful motoring club partnerships and help us keep more Western Australians safe through competitive, accessible and high-value insurance products and services. RAC and its members will benefit from our financial stability, advanced technology platforms, global reinsurance arrangements, and customer-centric claims processes. Together, we will continue to invest in initiatives that support local communities and provide value to RAC, its members, and Western Australia.” – IAG Managing Director and CEO Nick Hawkins.
