Insurers battle it out in crowded strata market
Plentiful capital and the massive growth of strata housing has led to a battle between insurers for a piece of the strata action.
With huge growth predicted for strata over the next two decades, and property prices rising steeply in centres such as Sydney and Melbourne, insurers are jostling to claim a long-term niche in the booming sector.
Brokers are shaking their heads over the eruption of fierce competition, which has seen premium rates for strata insurance slashed by up to one-third in the past few months.
CGU reports it’s under attack from aggressive discounting, while Allianz has weighed in and is wrestling with Steadfast.
Meanwhile, Suncorp has launched a strata product which offers a 20% discount for going direct.
The ramp-up in competition has even seen some insurers testing new business models to claim market share, whether that’s training strata managers or offering homeowners disaster resilience inspections in return for lower premiums.
Some say the sector is just too crowded and predict that the low premiums and the number of current players simply can’t last.