Addressing capacity constraints and transparency are top priorities to improve the situation in the strata insurance market, consultant John Trowbridge says in the final report delivered as part of a three-phase review. 
 
Mr Trowbridge says capacity is a clear priority but a “hard nut to crack” and suggests a grouping similar to the Insurance Council of Australia Business Advisory Council could provide a route to finding solutions.  
  
“The idea is to arrange for an expert group in support of the interests of owners to engage with a representative group of insurer and underwriting agency executives in search of initiatives that might lift market capacity,” the report says. “The expert group would likely comprise a small number of broker, strata manager and owner representatives.”   
 
The review’s third phase report, titled Energising the Strata Insurance Market: A blueprint for affordability, availability, competition, says there has been progress on improving disclosure transparency. 
 
Strata Community Association is in the process of preparing a professional practice standard for its members, while also engaging on implementation with the National Insurance Brokers Association (NIBA), which has improved transparency in its latest Code of Practice. 
 
Phase 2 of the review had proposed that the commission rebate/broker fee system should be phased out across this year and next.  
  
Mr Trowbridge says the view hasn’t been widely supported by strata managers or brokers, with many wishing to maintain existing practices despite the issues identified, but greater transparency would put owners in a better position to assess whether intermediary charges are fair and in their best interests.   
  
Other topics examined in the final report include the potential for greater transactional efficiencies, the benefits from more choice on excesses and the potential benefits of strata insurance data collection. 
 
Feedback from an industry sector forum indicates the Australian Securities and Investments Commission and Australian Prudential Regulation Authority are considering portfolio statistics for strata insurance, but likely timing is “not less than two years from now”. 
 
The paper adds another voice to calls for governments to remove or to reformulate stamp duty and, in NSW, to replace the emergency services levy with a more equitable funding model. 
 
The independent review was commissioned by Steadfast. 
 
The final report is available here.