‘Deep disappointment’: Motor Trade Association slams acquisition of major South Australian insurer
The Motor Trade Association SA/NT has strongly criticised a decision by the ACCC to allow the acquisition of RAA Insurance by Allianz.
The Australian Competition and Consumer Commission (ACCC) said in a statement this morning that it would not oppose the acquisition of RAA’s personal insurance business (RAAI).
“Our investigation focused on the closeness of competition between RAAI and Allianz and the extent to which other insurers are competing effectively to supply insurance to South Australians,” said ACCC Commissioner Dr Philip Williams.
“We also considered how competitive RAAI is now and is likely to be in the future without being acquired by Allianz. The likely impact of the acquisition on insurance prices, coverage and service offerings were all carefully considered.”
Williams said existing insurers with a significant presence in South Australia, such as Suncorp and IAG, would likely remain competitive after the acquisition.
He said the ACCC also considered the impact on independent repairers, saying it probably will not substantially lessen competition as Allianz is unlikely to have the ability to diminish prices and supply terms.
However, Motor Trade Association SA/NT CEO Darrell Jacobs expressed “deep disappointment” at the decision, which he said would put “crippling pressure” on independent and family-run repairers.
“This is a dark day for South Australian motorists and small businesses, with local member motor-club insurance on death’s door,” he said.
“Allianz is using South Australian trust in the RAA brand, while pulling the wool over their eyes. With this decision, South Australian motorists will get stung.
“RAA Insurance is now as local as lederhosen.”
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Jacobs said the acquisition would erode service quality and take away consumer choice.
“RAA Insurance has for a long time held the interests of its members first, particularly during the claims process. But local call centres are cold comfort for policy and underwriting decisions made overseas,” he said.
“The ability for motorists to make real choice of repair decisions is likely to be the first of many changes before us.
“Insurers need to work with automotive repairers and ensure customers get their choice of repairer without taking them for a ride – often kilometres from home.”
