LEICHHARDT MP Warren Entsch has welcomed news of increased competition in the North Queensland insurance market, with a new strata product being launched this week.
It comes as the major insurers felt the heat under questioning from the Northern Australia committee in Brisbane last Friday, where Mr Entsch warned that the government was prepared to legislate if affordable and available insurance remains unattainable for many.
Underwriting agency Brooklyn has advised that it will cover risk above the 26th parallel in Queensland, Western Australia and the Northern Territory for small and medium complexes up to 25 units.
“I congratulate Brooklyn for this move it’s refreshing to see an insurer who accepts that every strata building in north Queensland should not be ‘lumped into the same basket of not being able to withstand a cyclone’,” Mr Entsch said today.
“The view that buildings must be assessed and underwritten on their merits ties in very well with CGU’s program to assess their strata complexes.
“It’s also in line with the $12.5m provide by the Federal Government in the Budget to allow body corporates to undertake engineering inspections, to see if there are any high-risk elements to the property that can be improved upon.”
Mr Entsch said that the public release of the Australian Government Actuary’s report into strata pricing, comparing the cost of insurance over the past eight years between complexes in southern cities and North Queensland, was imminent.
“I’ve had some preliminary information come through and I have to say, it doesn’t look good for the insurers,” Mr Entsch said. “It tells us a lot of things that we already know, but rather than being anecdotal evidence, it uses hard data.
“There’s no way that insurers can continue to say it’s just a ‘natural correction of the market’ after a period of historical under-pricing.
“This will increase the pressure on insurers they know the writing is on the wall.”