Full capacity: Australia’s consolidation frenzy: Race against reform?

May 17 2025 by

Welcome to Full Capacity, a weekly briefing on all the most important developments of the past week with a personal take on the news from our editor-in-chief, Mithun Varkey, delivered to your inbox every Saturday. 

Appointment. WTW’s broking head Luke Ware has been handed a dual role to lead the company’s Asia businesses as well as corporate risk and broking. The move follows the departure of Simon Weaver, WTW’s former APAC head, who exited late last year. 

Nat cat. On Tuesday, an extremely rare hail event hit Beijing, with hailstones 4cm in diameter in parts of the city causing widespread damage to property and vehicles, with insured losses expected to exceed US$100 million. 

IAN Insight. The growth of India’s surety insurance market has been much talked about. Insurers are underwriting the country’s infrastructure boom. The market has seen new capacity with recent entrants like IFFCO Tokio and Liberty.  

However, a word caution from my colleague Marcus Alcock reminds us of the market’s fragility. As history shows us, when economic circumstances sour, one of the first sectors to be exposed is the construction sector, and this often shines a light on associated exposures. 

Australia consolidation 

IAG has announced its acquisition of the insurance business of Royal Automobile Club of Western Australia (RACI). The AU$1.35 billion (US$870 million) deal will include a consideration of AU$400 million for a 100% acquisition of RACI – the entity and the existing portfolio – and an upfront payment of AU$950 million for a distribution and brand licensing agreement.  

This deal follows IAG’s acquisition of RACQ in November and Allianz’s deal to buy Royal Automobile Association of South Australia’s life insurance deals.  

Both these deals are currently being probed by competition regulator, the Australian Competition and Consumer Commission (ACCC), and has seen opposition from motor industry lobby, the Australian Motor Body Repairers Association.  

It should be no surprise if the ACCC starts an investigation into the impact of the latest deal.  

However, as things stand, the ACCC can’t oppose mergers in court that reduce competition unless the effect is substantial. 

So, while everyone is racing to the finish line, one has to wonder if this recent flurry of deals is a desperate dash before the merger reforms, which introduce a mandatory notification regime, kick in on January 1, 2026. 

There might be an urgency among the buyers to close the deals before they add more teeth to the watchdog.  

Though the merger reform approach broadens the ACCC’s review to include the impact of serial acquisitions over a rolling three-year period, it remains to be seen what the newly installed chief executive of the ACCC, Sarah Proudfoot, thinks of the insurance market. 

 The Australian insurance industry is already quite consolidated with the big three-plus-one – IAG, Suncorp, QBE and Allianz – already controlling about 70% of the market.  

Further consolidation might just leave consumers with fewer choices and higher bills.  

Sure, breaking up the big players isn’t the answer (as Peter Dutton’s election flop proved – nobody wants that fight).  

However, more prudent regulation is called for to ensure the industry doesn’t become an exclusive club where only a few holds all the cards. 

People Moves 

HDI Global has appointed Casey Sandler as interim managing director of its Japan branch, effective August 1. He succeeds Uwe Jürgen Sievers, who will step down from the role after 30 years of service. 

Meanwhile, Axa XL continued its India build out with the appointment of a new CUO, Saumitra Sharma, from Swiss Re and three others. 

Zurich rejigged its SME team with ANZ head Theo Pitsikas named APAC head, while James Garrett will succeed him in Australia. 

Do check out our weekly people move round-up to stay up to speed on the most important appointments in the region. 

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