Strata Insurance Market Update

By Mitchell Lipscombe, Chief Operating Officer, BAC Insurance Brokers – 26 June 2025

After several years of steep premium increases and reduced insurer appetite, the strata insurance market along Australia’s east coast is finally showing signs of stabilisation. While challenges remain, proactive strata committees are increasingly able to secure better outcomes.

A Shift in Market Conditions

The recent “hard market” cycle—characterised by premium hikes, reduced competition, and stricter underwriting—appears to have largely achieved its purpose. For many insurers, premium adequacy has now been restored. As a result, we are seeing the first signs of moderation:

• Premium increases are flattening, particularly for well-maintained buildings with clean claims histories.
• Insurer competition is slowly returning, offering more choice for buildings that present well to the market.
• Premiums are aligning more closely with inflation and valuation updates, rather than arbitrary market surges.

BAC’s national portfolio of strata clients supports this trend. From March to May 2025, most premium increases reflected inflationary pressures and updated building valuations, not major market corrections. In many cases, committees that engaged early and completed a full market review with their broker achieved meaningful savings or improved coverage.

What Insurers Are Looking For

Today’s insurance environment rewards preparation. Schemes that maintain accurate valuations, address known defects, and present well-documented maintenance records are far more likely to attract favourable terms. Key risk factors insurers are actively evaluating include:

• Recent claims history
• Outstanding defects (including waterproofing or fire safety)
• Presence of combustible materials (e.g. ACP, EPS)
• Age of infrastructure
• High-risk commercial tenancies
• Building sum insured over $50 million

For higher-risk buildings, insurer caution remains high. These schemes may still face limited capacity, increased excesses, or no quotes at all, especially in the case of large, complex assets. Specialist brokerage support is often required to engage insurers in these situations.

The Role of Your Broker and Strata Manager

Navigating this evolving market successfully requires coordinated action. A skilled insurance broker does far more than gather quotes—we help your committee understand how your property is perceived by insurers and guide improvements that can enhance your insurability. Your strata manager plays a critical supporting role. At Strata Plus, managers actively assist with:

• Coordinating repairs and defect rectification
• Ensuring up-to-date building valuations
• Maintaining accurate records and documentation
• Presenting your building’s risk profile in its best possible light

Even initiating a defect rectification process—rather than waiting for defect litigation outcomes—can help demonstrate governance and improve your standing with insurers.

Looking Ahead

While we welcome signs of market relief, premium increases should still be expected, especially for properties with risk factors or those with delayed maintenance. However, committees that engage early, remain transparent, and work collaboratively with their broker and strata manager are best placed to secure competitive outcomes.

What You Can Do Now

• Start early. Engage your broker at least 12–14 weeks before renewal.
• Review building valuations regularly. Outdated figures can inflate premiums or reduce insurability.
• Prioritise maintenance and defect rectification.
• Ask questions. Understanding your building’s risk profile is key to long-term savings.

BAC will continue to monitor market trends and work closely with strata managers and committees to help owners corporations navigate this next phase with confidence and clarity.

Disclaimer:

The information provided here is general in nature and should not be taken as individual financial advice. Please consult your insurance broker for guidance specific to your property.