The Australian Consumers Insurance Lobby (ACIL) has pressed Allianz to speed up the transition of its residential strata portfolio into the cyclone reinsurance pool, as “serious market failures” have left consumers in the north struggling to find cover. 

It says at present no strata insurer will offer insurance for buildings in northern Australia with a sum insured of more than $5 million for new clients, with the exception of some very exclusive arrangements. 

“ACIL has identified serious market failures in the strata insurance industry in northern Australia,” the lobby group says. 

“Lack of availability of strata insurance is a market failure that is hurting consumers. This market failure is having a detrimental impact in consumer confidence for the insurance industry.” 

Last month Allianz advised it will transition its householder portfolio into the pool by the start of next month, becoming the first insurer to participate in the Federal Government-backed $10 billion scheme. 

The insurer expects to transition its residential strata and small business property some time during next year but provided no indicative dates in its submission to the Federal Parliament Joint Select Committee on Northern Australia. 

ACIL welcomes the confirmed start date for household insurance but it believes there is a “pressing need” for quicker strata action. 

“Allianz’s participation in the cyclone reinsurance pool is a win for consumers who were dealt a significant blow in July when it was revealed that no insurers would on board for the July 1 rollout,” ACIL Chair Tyrone Shandiman said. 

“We have written to Allianz asking they deal with the review of strata insurance with expedience, to support the needs of consumers in northern Australia.” 

ACIL says strata insurance clients who are unable to find a local insurer have turned to offshore providers, often facing premiums 10-20 times the cost of what is offered in other parts of Australia. These policies also often do not comply with basic requirements under strata legislation.