NRMA’s owner to buy RACQ insurance
NRMA’s parent company IAG will acquire the insurance business of the Royal Automobile Club of Queensland, buying 90% of the business for $855 million, with an option to buy the remaining 10% after two years.
The deal gives IAG a 25-year exclusive distribution agreement to sell home and car insurance policies, and according to the AFR, has been in the works since May.
Morgan Stanley analyst Andrei Stadnik said the deal “addresses IAG’s low market share in fast-growing Queensland” but “it is not clear exactly how profitable RACQ is, given recent member remediation and additional reinsurance for CTP book in run-off”.
