Home / Local / Amusement operator body taps Aon to help with mutual fund
3 May 2021
The non-profit Australian Amusement Leisure and Recreation Association (AALARA) has asked broker Aon to help the industry set up and run a discretionary mutual fund, according to an email to its members last week.
The move comes more than a month after the industry body said it was exploring such a scheme as a way out of the tough insurance climate, which has seen many of its members struggling to afford public liability policies.
“As you would be aware the amusement, attractions and leisure industry is facing the catastrophic consequences of a failing insurance market,” a copy of the email, seen by insuranceNEWS.com.au, says.
“In effort to overcome this issue, AALARA has entered into a partnership with Aon to establish an industry owned and operated discretionary mutual fund for the benefit of members.
“Mutuals offer an alternative to the traditional insurance product and are well established in Australia having been established over the years to respond to areas of the market were insurance was becoming difficult to obtain or was cost prohibitive.
“Mutuals are successfully operated by local councils, international restaurant chains, universities and motor trades.”
insuranceNEWS.com.au has reached out to Aon and AALARA for a response.
As part of the preparation for the proposed scheme, a feasibility study will first be conducted.
AALARA says the study is a “critical first step” and urged every member to complete an online survey.
“Completing the survey does not mean a member is pre-committed to join the mutual… however [it] allows Aon to evaluate risk and determining underwriter interest in working with the mutual,” the email says.
“Participation in the feasibility study will help those members who need an alternative to traditional public liability insurance due to cost and or availability. If you don’t need the mutual yourself, you can help other members.”
In March AALARA President Shane McGrath told insuranceNEWS.com.au the body had found an Australian-based partner that is “well renowned” in the insurance industry to run the scheme if Government funding is secured.
“We are ready to go,” he said at that time.
AALARA had met up with representatives from the Morrison Government to drum up support for the mutual scheme.
It comes as premiums have soared at least 300% as insurance providers continue to pull out, leaving many in the industry struggling to afford cover, which is usually mandatory as part of their operating licence conditions.
A discretionary mutual fund, as the name implies, offers “discretionary cover” and is used as an alternative to counter high premiums. It is usually established by a group of people or organisations with a common interest.