The ACCC’s approval of IAG’s acquisition of Aviva’s Australian general insurance business CGU will give IAG CEO Michael Hawker a huge insurance empire that controls more than a quarter of the national general insurance market.

Both CGU and IAG deal in personal lines insurance, and the acquisition means the joint group will hold the highest levels of market concentration in the NSW (58%) and Victoria (51%) domestic motor insurance markets.

The ACCC said the market for domestic motor insurance is in transition to becoming national because of changing distribution channels and the emergence of national insurers.

“The ACCC found a substantial lessening of competition from the acquisition was unlikely because IAG will continue to face vigorous competition from other significant players including Suncorp, Royal & SunAlliance, QBE and Allianz,” the regulator said in a statement. “There is also evidence of some new entry into the general insurance market.”