Axa XL-owned Brooklyn Underwriting has pulled the plug on its strata business in northern Australia, a move that industry watchers say is a sign of the catastrophe-prone region’s worsening insurance problem.

The underwriter’s website says the Tropical Strata product is no longer available for renewals and new business. The business will however continue to service and provide claims services for current active policies.

Brooklyn Underwriting declined to comment on the move when contacted by insuranceNEWS.com.au.

Launched in 2014, Tropical Strata was aimed at residential, commercial and mixed used strata complexes located above the 26th Parallel South Latitude in WA, Queensland and the NT, according to a product document.

Queensland-based Strata Insurance Solutions, authorised representatives of Insurance Advisernet, says it has not been informed by Brooklyn that its strata product is no longer available.

Practice Manager Tyrone Shandiman, who focuses on the north Queensland market, says he heard about the development yesterday from an insurer.

“We have had policies with them over the years so we definitely do business with them but there was no formal notification to brokers that I was aware of,” Mr Shandiman told insuranceNEWS.com.au today.

He says Brooklyn’s decision does not surprise him. “We never really saw Brooklyn in the end as a major player in north Queensland,” he said. “They had such a limited capacity. 95% of our north Queensland business did not fit their appetite.”

He says the insurance market in the region is “dire” with existing players like IAG-owned Strata Unit Underwriters limiting their risk appetite.

“Some buildings fit within the guidelines of insurers’ appetite,” he said. “But for some buildings, they just can't get insurance and if they do get it, it’s very, very expensive.

“So it has gotten a bit harder to write business up north.”

Margaret Shaw, a Townsville-based independent insurance affordability campaigner, says she knows of at least seven strata complexes that are insured with Brooklyn.

“If they have pulled the plug and are not going to offer renewals, that is going to make life very difficult,” she told insuranceNEWS.com.au. “It’s going to devastate a lot of people.”

She says the region urgently needs “fair and affordable” insurance cover. “It’s all we ask for.”