A non-profit body representing amusement, leisure and recreation operators has met this week with the Morrison Government to drum up support for a mutual scheme to address the public liability insurance crunch facing its members.

Australian Amusement Leisure and Recreation Association (AALARA) President Shane McGrath says the proposed discretionary mutual fund is a “long-term” solution for members caught up in the tough insurance climate.

Premiums have soared at least 300% as insurance providers continue to pull out, leaving many in the industry struggling to afford cover, which is mandatory as part of their operating licence conditions.

“We are facing the catastrophic consequences of a failing insurance market,” Mr McGrath told insuranceNEWS.com.au today. “We have asked the Federal Government to provide us with some support.

“We’re looking for a grant to get started. We’re a not-for-profit association with modest capital so we really need some support from the Government to step in and get this established in the interest of tourism and jobs.”

He says AALARA was given a “fair hearing” in Tuesday's meeting with Assistant Treasurer Michael Sukkar and a senior adviser to Treasurer Josh Frydenberg.

“We presented all our points as to why we think this is the only solution for our industry going forward… We are hoping for a quick turnaround because the consequences are just going to snowball,” Mr McGrath said.

“We are going to have more and more rides sitting vacant in storage sheds around the country, we are going to have more closures if we don’t get a solution.”

He says AALARA has already found an Australian-based partner that is “well renowned” in the insurance industry to run the scheme if Government funding is secured. “We are ready to go,” he said.

A discretionary mutual fund, as the name implies, offers “discretionary cover” and is used as an alternative to counter high premiums. It is usually established by a group of people or organisations with a common interest.

Meanwhile, NSW-based HIB Insurance Brokers says it is working on a mutual scheme with two Australian underwriting agencies to address the same issue.

Many in the amusement leisure industry have been informed by their brokers that their policies will not be renewed when they expire in the second-half of the year, a situation that could potentially force many to close down unless an insurance solution is found.

HIB MD Michael Alexander says he has raised the idea with representatives from the Federal Government, hoping there will be some form of financial support from Canberra to get the mutual pool up and running.

But the Government has told him to let AALARA handle the matter instead.

“I’m not sitting on my hands,” Mr Alexander told insuranceNEWS.com.au today. “I’m working with two underwriting agencies in Australia that specialise in this leisure and amusement industry.

“We have a lot of data. We’re combining our data to put forward to reinsurers to see if we can get somebody on board.”

He says it would be good if the Government steps in to support a mutual pool for the industry.

Mr Alexander says London insurance providers, who underwrite most of the public liability policies issued in Australia, are unfairly comparing the local amusement leisure industry with the US and the UK.

“In Australia, our industry is more heavily governed and regulated than the rest of the world,” he said. “We have had major losses in Australia but you have that in all industries.”