Northern and regional Queensland specialist Sure Insurance says it is raising its sum insured limit for residential strata to $20 million from $5 million, increasing competition in the market. 

The residential strata insurance policies with an effective date from April 1 are being underwritten by Axa’s XL Insurance. The increase follows the introduction of the federal government-backed cyclone reinsurance pool, which aims to improve cover affordability and accessibility in northern Australia. 

Sure MD Bradley Heath says the region’s affordability crisis has been exacerbated by some providers exiting residential strata, reducing competition and placing enormous upward pressure on premiums. 

“Many Northern Queensland body corporates were faced with the prospect of not being able to adequately insure their complexes or were forced to source residential strata insurance cover from offshore providers,” he said today.

“Through this significant residential strata insurance sum insured increase to $20 million, many more body corporates and lot owners across northern and regional Queensland will be able to access alternative competitive strata premium offerings.”

Sure says it will recognise and reward – with reduced premiums – well-managed body corporates that have enhanced the resilience of their complexes. 

The region targeted may include more than 500 strata complexes in the $5-$20 million range, based on rough estimates. 

The Australian Competition and Consumer Commission’s Northern Australia Insurance Inquiry found competition for strata properties with 11 or more dwellings and with sums insured above $5 million was “soft”, especially for those with a higher exposure to cyclone and water damage. 

“There are fewer available insurers and insurer intermediaries for these properties, and those remaining appear to be reducing their exposure to these risks by increasing underwriting restrictions on the type and location of strata property they are willing to insure,” it said in its 2020 final report. 

Early last year, Sure became the second insurer to join the cyclone reinsurance pool, which covers home and residential strata losses caused by cyclones and related flooding from the time an event is declared until 48 hours after it has ended. The pool, which all insurers with eligible risks must join by the end of this year, also includes limited commercial cover.

Steadfast announced last year that it was acquiring a 70% stake in Sure, which began underwriting home and contents policies in northern Queensland in 2019. It introduced residential strata, then underwritten by Liberty Mutual, in 2020.