IAG announces strategic acquisition

Insurance Australia Group (ASX:IAG) has announced a 25-year strategic alliance with the Royal Automobile Club of Queensland (RACQ). IAG will acquire 90% of RACQ's insurance underwriting business for $855 million, with an option to purchase the remaining 10% in two years. The transaction aims to leverage IAG's resources to offer insurance products to Queenslanders and is expected to complete by the third quarter of 2025, pending approvals.

Overview of IAG's strategic alliance with RACQ

Insurance Australia Group (ASX:IAG) has announced a major strategic alliance with RACQ, acquiring a 90% stake in its insurance business for $855 million. This move aligns with IAG's ambition to strengthen its presence in Queensland, leveraging RACQ's trusted brand while introducing IAG's technological and financial expertise. The partnership is expected to boost IAG's Gross Written Premiums by approximately $1.3 billion and generate synergies of over $50 million annually. Completion is anticipated in the third quarter of 2025, subject to regulatory approvals. This alliance supports IAG's goals of enhancing community resilience and aligns with its corporate strategy of collaborating with like-minded organizations.

Executive insights on IAG and RACQ partnership

This alliance with RACQ is a significant step in strengthening our presence in Queensland through a trusted brand. It aligns with our strategy to collaborate with leading member motoring organizations that share our values of community resilience and climate action.