NEWS

McGrathNicol Report on NetStrata Leaves More Questions Than Answers - NSW Fair Trading Must Investigate Further

The Australian Consumers Insurance Lobby (ACIL) has today released its analysis of the McGrathNicol report into NetStrata, raising serious concerns about transparency, decision-making processes, and the impact on consumers. While the report attempts to assess whether NetStrata’s wholly owned brokerage firm, Strata Insurance Services (SIS), charged excessive brokerage fees or insurance premiums, key issues remain unresolved, requiring further investigation by NSW Fair Trading.

Click the below link to access the report:

ACIL’s analysis raises issue with potential gaps in the report’s methodology and findings, including concerns over sample selection, unexplained cost reductions, and whether lot owners provided informed consent when engaging SIS. Most notably, the report acknowledges that 8-9% of consumers in the sample were charged brokerage fees of 47% to 69%—yet fails to assess whether this issue is more widespread across NetStrata’s entire portfolio.

"A sample of just 5% of clients may not accurately reflect broader issues. It is unclear whether the selection methodology was statistically sound or if it skewed results toward a more diverse sample that does not represent the full client base. For example, the report highlights excessive fees for buildings with premiums between $827 and $24,169—but was the sample truly proportionate to the number of consumers in this category, or does it underrepresent those most affected? It is simply not acceptable for 8-9% of consumers to be paying excessive brokerage fees between 47% to 69% without further scrutiny. If proper processes under the Strata Schemes Management Act were not followed, and lot owners did not provide informed consent, then this is a serious consumer protection issue." said Tyrone Shandiman, Chair of ACIL.

The report also reveals that insurance costs within the review sample dropped from $1,975,389 in 2023 to $1,197,526 in 2024, yet provides no explanation for this sharp decline. This coincides with ACIL referring 146 cases of overcharging misconduct to ASIC and the ACCC in February 2024, raising questions about whether NetStrata and SIS reduced fees only after facing potential regulatory scrutiny.

Given these concerns, ACIL is calling on NSW Fair Trading to take immediate action by investigating a grater dataset of strata buildings paying less than $25,000 in total insurance costs, as this segment may have a higher proportion of clients subjected to excessive fees.

ACIL understands NSW Fair Trading is currently investigating the issues surrounding NetStrata, and this report forms part of their ongoing review. "NSW Fair Trading must now step up and prove it is a tough cop on the beat. This report does not provide the full picture, and strata owners deserve transparency, accountability, and consumer protection" Mr. Shandiman said.

ACIL urges NSW Fair Trading to conduct a comprehensive review of NetStrata’s insurance practices, ensuring that all strata owners receive fair treatment and that compliance with the law is upheld.

ACIL Labels ICA’s Code Review Response a ‘Predictably Superficial”

The Australian Consumers Insurance Lobby (ACIL) has today released a groundbreaking report titled "Falling Short: Why the Industries Initial Response Fails to Deliver Meaningful Reform in the Code of Practice." This comprehensive analysis critiques the Insurance Council of Australia's (ICA) initial response to the General Insurance Code of Practice Review, revealing systemic shortcomings that leave Australian consumers vulnerable.

Click the below link to access ACIL's Report

Key Findings:

Critical Recommendations Ignored: The first tranche of reforms does not address 49 critical recommendations from the Flood Inquiry, leaving key consumer protections unaddressed.
Lack of Transparency and Reform: The ICA’s response demonstrates a reluctance to embrace meaningful change, opting instead for superficial reforms that fail to address well-documented issues.
Systemic Misconduct: Expert reports are routinely manipulated to minimise claim payouts, leaving consumers at a significant disadvantage.\

ACIL Chairperson Tyrone Shandiman said, “The industry response is yet another predictable and concerning failure to address systemic issues in the insurance industry. Opposition Leader Peter Dutton threatened to 'intervene' in the market by breaking up big insurers—clear evidence that policymakers are fed up with the industry's failures. Consumers deserve stronger protections, and if the industry won’t act, we will. ACIL is prepared to take this fight to the court of public opinion, leveraging media, political engagement, and legal avenues. We are also reviewing a revelatory letter from a veteran industry insider that could prompt further action—potentially making the industry very uncomfortable. If the industry doubts our capabilities, they need only look at our impact on the strata management sector. Watch this space!”

The report outlines actionable recommendations for the ICA, ASIC, and elected representatives, including stronger regulatory oversight, increased transparency, and proactive measures to prevent future abuses. It also calls on ASIC to withhold sign-off on the revised Code of Practice until meaningful reforms are implemented.

Call to Action

ACIL is urging regulators, lawmakers, and industry leaders to take immediate steps to address the issues raised in the report. The organisation also invites industry insiders to come forward with information, whether anonymously or confidentially, to help create a fairer and more transparent insurance system.

Join the Fight for Reform

ACIL calls on industry insiders, whistleblowers, and concerned Australians to stand with us in pushing for a fairer, more accountable insurance system. If you have information to share, ACIL encourages you to reach out anonymously or confidentially.

ACIL Supports Dutton’s Tough Stance on Insurers, Calls for Urgent Reform

The Australian Consumers Insurance Lobby (ACIL) has backed Opposition Leader Peter Dutton’s strong posturing against the insurance industry, calling it a necessary step in holding insurers accountable for skyrocketing premiums, unfair practices, and their failure to implement real affordability solutions.

ACIL has written to Mr. Dutton to commend his position on breaking up the insurance sector, an issue that has struck a chord with frustrated consumers across the country. The insurance industry’s response to these remarks—one of panic and pushback—highlights just how resistant it is to scrutiny and reform.

Click the below link to view ACIL's letter to Mr Dutton:

"Peter Dutton’s comments have caused a major stir within the insurance industry, which is exactly what’s needed to drive change," said Tyrone Shandiman, Chairperson of ACIL. "Insurers have treated both policymakers and consumers with contempt for years, putting profit ahead of fairness, resisting meaningful reform, and failing to take appropriate action to improve affordability."

ACIL’s letter to Mr. Dutton outlines key reforms needed to fix the industry, including:

Examining structural reforms, including breaking up the insurance industry, alongside key recommendations from the recent Government Inquiry into the Impact of Climate Risk on Insurance Premiums and Availability.
Putting the insurance industry on notice—clean up their act, or a Royal Commission will be on the table under a Coalition government.
Stronger regulation of the Code of Practice, transferring the three year review process to ASIC.
Independent consumer advocacy in claims and expert reports, introducing public loss adjusters and stricter governance to eliminate conflicts of interest.

"Consumers are fed up. The insurance industry has ignored multiple inquiries, obstructed government interventions like the Cyclone Reinsurance Pool, and lobbied against reforms that would protect policyholders," Shandiman said. " These comments highlight the urgent need to hold insurers accountable and we strongly support a tough stance against the industry’s failures."

For years, insurers have dictated the terms of the market with little oversight, using complex pricing models, reducing coverage, and making it increasingly difficult for consumers to get fair outcomes. Despite multiple government inquiries and consumer advocacy efforts, the industry has failed to take meaningful steps to address affordability and transparency. It is clear that without strong intervention, insurers will continue to prioritise their bottom line over the needs of everyday Australians. ACIL has formally requested a meeting to discuss these issues further and explore solutions to restore fairness and accountability in the insurance market.

"The industry’s dominance and arrogance have gone unchecked for too long. If insurers want to avoid further scrutiny, they need to start putting consumers first. Otherwise, the government must step in and force them to act," Shandiman said.