Brokers and other groups involved in the strata sector have been urged in an independent review to collaborate on solutions to capacity constraints that are driving up premiums. 
 
The final report in a review conducted by John 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 of strata insurance practices, commissioned by Steadfast, has been completed in three phases, with the first focusing on implementing a disclosure regime and the second on potential remuneration reforms. 
 
The report says there has been progress on improving disclosure transparency, with Strata Community Association in the process of preparing a professional practice standard for its members, while also engaging with the National Insurance Brokers Association (NIBA) and some of its members for assistance in implementing the standard. 
 
“It is a valuable initiative for the strata industry and will be enhanced by the 2022 Insurance Brokers Code of Practice which has introduced new disclosure measures for insurance brokers to address the issue of transparency,” the report says. 
 
Phase 2 of the review had proposed that the commission rebate/broker fee system should be phased out in three stages via a structural realignment 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 improved transparency would put owners in a better position to assess whether intermediary charges are fair and in their best interests.  
 
NIBA CEO Philip Kewin says the report delves into some complex issues currently prevalent in the strata insurance space.   
 
“This is a comprehensive report and illustrates the complexities of the strata market and the important role played by the broker, strata managers, insurers and the owners corporation,” he said.