Multi-Level Mixed-Use with Wellness Tenants

The owner of a multi-level building in Sydney's Eastern Suburbs was non-renewed by their existing insurer. The building had beauty and wellness retail tenants on the lower levels - including a yoga studio - with residential above.

The non-renewal came after the insurer tightened their book on wellness and fitness tenancies. A wave of arson attacks targeting pilates studios and gyms across the NSW Central Coast and Newcastle in early 2026 had spooked parts of the market, and some insurers started treating yoga, pilates, and fitness tenancies as higher risk regardless of location.

After the non-renewal, they managed to get one quote from another insurer - around $22,500. That was the only offer on the table after eight other insurers declined outright. The $22,500 premium was significantly higher than what they'd been paying and didn't reflect the actual risk profile of the building.

The massive gap between the previous premium and the only available quote suggested the risk was being mispriced. We set out to find an underwriter who would assess the actual risk rather than applying a blanket mixed-use loading.

• Tenancy risk profiling: We detailed each tenant's activities - including the yoga studio - showing underwriters that these were low-fire-risk operations with no cooking, no chemical storage, and no heavy equipment. Crucially, we differentiated this building from the arson-affected fitness premises elsewhere
• Building assessment: We presented the building's condition and fire safety measures to counter the generic mixed-use risk assessment
• Market selection: We targeted underwriters who differentiate between high-risk mixed-use (hospitality, food) and lower-risk mixed-use (retail, professional services, wellness)

The non-renewal was the primary obstacle. When an insurer chooses not to renew, it creates urgency and can signal to other underwriters that there's an issue with the risk - even when the real reason was the insurer pulling back from wellness tenancies across their whole book.

The broader market shift around yoga and fitness tenancies didn't help either. The arson incidents on the Central Coast meant some underwriters were applying blanket loadings or exclusions to any building with a wellness tenant, regardless of the individual property's risk profile.

The single quote of around $22,500 reflected that nervousness. Finding an underwriter who'd assess the actual property rather than tarring it with a market-wide brush was key.

We placed comprehensive cover at approximately $5,900 - saving the owner roughly $16,600 compared to the only other available quote of around $22,500.

The outcome demonstrates why it pays to have a broker who understands mixed-use property insurance and can access markets that price based on the actual risk, not just the classification.