The report delves into several pressing challenges impacting the sector, including significant inflation in construction costs, supply chain disruptions stemming from the COVID-19 pandemic, an uptick in natural disasters, and the pervasive issue of underinsurance. Notably, CHU's analysis indicates that, despite these challenges, affordability remains less of a concern in strata insurance compared to the broader home insurance market.
Emerging risks are also highlighted, such as the increasing incidence of fires caused by lithium-ion batteries, a rise in arson attacks targeting tobacconists, and the widespread presence of building defects. The report identifies building defects as a particularly significant challenge, underscoring the need for proactive measures to address these issues.
CHU CEO Kimberley Jonsson acknowledges the heightened media attention on the strata sector in recent months, with a focus on transparency and remuneration disclosure. She views this increased scrutiny as an opportunity to engage with property owners about their buildings and insurance policies, and to educate them on the critical role that strata insurance plays in community resilience.
For strata property owners and investors, the insights provided in CHU's report are invaluable. Understanding the current challenges and emerging risks enables stakeholders to make informed decisions regarding their insurance coverage and risk management strategies. The report also serves as a call to action for the industry to enhance transparency, address building defects proactively, and adapt to the evolving risk landscape to ensure the continued affordability and effectiveness of strata insurance.
