Insurance Council admits ignorance on strata insurance hikes and funds JCU research

In a post last month, I observed that the Australian Government Actuary found insurers were struggling to understand the risks they face from natural disasters such as cyclones, and hence it is possible that huge increases in insurance premiums for North and Far North Queensland apartment blocks were an over-reaction. I’m pleased to see the Insurance Council of Australia is willing to admit it can’t explain the magnitude of recent premium increases and is willing to fund research at James Cook University in Townsville to better understand risks to apartment buildings. As the Townsville Bulletin reported yesterday:

AUSTRALIA’S major insurance body will fund research at James Cook University in a bid to drive down spiralling insurance costs for North Queenslanders.

The Insurance Council of Australia yesterday announced they would work with experts to determine why the cost of insuring unit or strata-properties has skyrocketed by up to 800 per cent.

Researchers at Townsville’s JCU cyclone testing station will commence their investigation next month, in a bid to bring much needed relief to thousands of property owners.

It is hoped the outcome may also alleviate the hip-pocket pain experienced by stand-alone home owners.

The research aims to identify the “key exposures” of strata-titled property that may be causing insurable losses.

The announcement follows hikes in premiums on residential unit properties in North Queensland, particularly in the wake of Cyclone Yasi and the southeast Queensland floods.

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