CGU Insurance

The ACCC has blocked IAG from buying the Royal Automobile Club of Western Australia's insurance business for $1.35 billion, saying the proposed deal will substantially lessen competition.

IAG is Australia's largest general insurer, owning the brands including NRMA, CGU and WFI.

This morning, the competition regulator decided IAG must not put into effect its proposed acquisition of RAC Insurance, saying the two companies both supply motor vehicle insurance and home and contents insurance in WA.

The acquisition would combine two large insurers, resulting in a substantial increase in IAG's market share and a significant increase in market concentration, ACCC Chair Gina Cascott-Leib said.