Strata Firm Commits to Transparency After Fee Backlash

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Netstrata has expressed serious concern over accusations made in an ABC investigation, emphasizing the value they place on customer relationships and the indispensable role transparency plays in both their reputation and the wider industry. "Our commitment to our clients is unequivocal, and we acknowledge the significance of maintaining clarity in all our operations," a Netstrata representative articulated in a communiqué to industry publication insuranceNEWS.com.au. Additionally, they extended an apology to any of their clients who might have experienced opaque financial dealings and affirmed the in-progress execution of a thorough audit to address and resolve any ambiguities still present.

Substantive evidence from the ABC report points to Netstrata’s wholly-owned subsidiary, Strata Insurance Services, setting client fees well above customary market rates. For instance, stakeholders in one apartment complex were burdened with brokerage costs equating to commonly 64% of the base premium—an aspect that was only referenced in aggregate in financial reports circulated to property owners by the company.

Note of controversy also extends to Netstrata's contractual engagements with various other service providers and vendors, fostering additional layers of scrutiny. Detailed in these considerations is feedback from the Australian Consumers Insurance Lobby (ACIL), which previously urged investigations by regulatory bodies such as the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission into broader strife within the strata management sector.

Furthering its initiative to bring to light experiences within the strata insurance space, ACIL is currently consolidating data via an online questionnaire from numerous stakeholders including individuals, enterprises, and sector experts.

From its humble beginnings in 1996, Netstrata has grown considerably, currently boasting a substantial presence across several Australian metropolises including Sydney, Newcastle, and Wollongong. This growth aligns with its transparent disclosure of owning Strata Insurance Services in obligatory annual reports directed to its client base, as noted by the ABC coverage.

Stephen Brell, the Managing Director at Netstrata, offered a Profound indicator of their longstanding transparency practice: "We make it unambiguously clear to our customers that we operate an in-house brokerage, which, in turn, administers associated fees—these are invariably disclosed upon policy placement," he assured in the ABC report.

Published:Sunday, 24th Mar 2024
Source: Paige Estritori

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