This article about the best strata insurance 2020 has been supplied by Simon Plummer, StrataRatings.
You may recall that our 2019 Ratings unexcitedly had no changes from our 2018 Ratings. Well, things have changed this year!
Again, we’ve seen a healthy number of policy updates in 2019 with 55% of residential policies and 63% of commercial policies receiving an update. Many of these updates contained minimal material change however and were mostly compliance focussed such as adding AFCA contact details.
There were however some policy changes which had a fundamental shift in the quality of the product which resulted in a change in Rating.
Notably, we also saw two products leave the residential market and another two leave the commercial market.
Our rating methodology remained the same since inception and essentially considered the following:
- Is the policy an Insured Events policy or a Broadform Accidental Loss/Damage policy?
- Who is the insurer?
- Is the product freely available to purchase?
- How comprehensive is the wording?
Full detail of this methodology can be found here.
What Ratings Changed?
Four residential Ratings changes occurred this year which stemmed from changes in underwriting structure. Both Brooklyn Underwriting and Axis Underwriting moved from offshore Lloyd’s syndicates to onshore Australian insurers which upgraded their Rating from Silver to Gold.
Expert Strata Insurance and Longitude Insurance had their Ratings downgraded from Gold to Silver due to a change from a single underwriter to multiple underwriters.
In the commercial Ratings, Brooklyn Underwriting were upgraded while Expert Strata Insurance and Longitude Insurance were downgraded for similar reasons.
Stata insurance is all about the transfer of risk and as complexity is added to the underwriting structure such as will offshore syndicates or multiple incumbents, the transfer of this risk becomes less certain.
The above reason is why the market leaders in the space have strong and secure underwriters. In addition to this strong base, they build comprehensive products that suit the customer and distribute these fairly.
An analogous example is building a bridge with poor foundations. Perhaps the bridge has some great features; it has eight lanes, smooth tarmac and world-class onramps. For those using it in non-peak periods, great. But for those who happen to use it in dense traffic when it is under maximum load, there is a good chance of failure.
So, there you have it – the StrataRatings awards for 2020!
Come and check out which Rating your policy achieved: Click here to see the ratings for Best Strata Insurance 2019!
StrataRatings is Australia’s first and most respected strata insurance evaluator. As a pioneer in the strata insurance industry, StrataRatings was established to close the information divide between insurers and strata schemes and to cut through the complexities of Australia’s strata insurance industry.
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This post appears in Strata News #312.
This article has been republished with permission from the author and first appeared on the StrataRatings Website.
Do you have a suggestion for best strata insurance in 2019? Have a question or something to add to the article? Leave a comment below.