The competition watchdog has begun market inquiries into IAG’s proposed acquisition of RACQ Insurance and the Allianz Australia purchase of RAA Insurance.

It has called for submissions on both deals by February 14 and says it will make final decisions or release statements of issues outlining concerns on April 24.

Equity analysts previously said the regulator would take a close look at listed company IAG’s expansion in Queensland, where RACQ ranks second in the personal lines markets. 

“IAG and RACQI both provide personal lines general insurance, including home, contents and motor vehicle insurance, and acquire ancillary repair services, including smash repair services, windscreen repair and replacement services, and building repair services,” the Australian Competition and Consumer Commission says.

The ACCC inquiry seeks views on how closely the two compete, the extent to which alternative suppliers will “competitively constrain” the merged entity, the likely impact on prices and quality of personal lines products, and the effect of IAG’s increased scale on the acquisition of ancillary repair services, including price or supply term impacts.

The regulator say Allianz and SA-based RAA overlap in the supply of personal lines cover, including home, contents and motor insurance, and it has put forward similar questions for feedback.

IAG announced its $855 million deal to acquire 90% of the RACQ insurance underwriting business in November. It would have an option to buy the remaining 10% in two years. The transaction includes a 25-year distribution agreement.

A few days later, Allianz Australia said it had struck a $642 million agreement with RAA that includes the acquisition of its insurance business and a 20-year distribution agreement.

The proposed deals do not include the RACQ and RAA membership-based businesses, which are best known for roadside assistance.

The ACCC’s list of questions seeks input on whether Queensland and SA should be considered separate geographic markets and whether the insurers involved have a reputation for being low-price, innovative or aggressive competitors.

It also asks for details on market shares, broken down by line if possible, “recent or upcoming” examples of personal lines market entries or exits, and barriers to entry.

Letters inviting feedback have been sent out for each deal. Details are available here.