How AI is Reshaping Insurance and Governance in Sectional Title Schemes

Artificial intelligence (AI) is no longer just a buzzword, it’s becoming a real game changer in how sectional title schemes are managed and governed. While much has been said about its impact on community scheme management more broadly, it’s worth considering how these technologies are already reshaping the insurance and governance landscape for bodies corporate, trustees, and managing agents.

At MONO.insure Brokers, we focus on the unique insurance needs of sectional title schemes. We believe AI has the potential not only to streamline administrative processes but also to potentially strengthen governance, enhance compliance, and reduce risk for all stakeholders.

AI in the Insurance Landscape

Insurance in sectional title schemes has always been complex. Balancing legislation, trustee duties, compliance with CSOS regulations, and ensuring adequate cover. AI introduces new tools to make this easier and hopefully more effective:

• Policy and Document Analysis AI can quickly review and summarise long insurance policies, valuations, and maintenance plans. Trustees can instantly identify gaps in cover or exclusions that may affect their scheme.

• Anomaly Detection By scanning financial statements and claims data, AI can flag potential irregularities such as suspicious claims, underinsurance, or unexplained spending trends.

• Risk Forecasting Drawing on historical claims data, AI can predict where risks are likely to arise in future — for example, recurring geyser replacements, structural defects, or patterns of liability claims.

• Plain-Language Reporting Complex policies and compliance documents can now be interpreted into clear, everyday language, making it easier for trustees and owners to make informed decisions.

Governance in the Age of AI

Governance in sectional title schemes depends heavily on the competence and diligence of trustees. AI is shifting expectations here too:

• Enhanced Due Diligence With AI tools available, trustees are expected to do more than just rely on managing agents or insurers. They can (and should) interrogate levy schedules, insurance valuations, and policy terms with greater scrutiny.

• Regulatory Compliance Duties like maintaining books of account, ensuring buildings are adequately insured, and preparing annual financials can all be stress-tested by AI. Regulators such as CSOS may eventually adopt AI themselves to identify compliance gaps.

• Higher Standards of Care Trustees’ fiduciary duties under CSOS regulations — to act honestly, in good faith, and with reasonable care, skill and diligence — may increasingly be interpreted to require the use of generally available AI tools.

What This Means for Trustees, Managing Agents, and Brokers

The evolvement of AI doesn’t replace the need for professional expertise. Instead, it could raise the bar:

• Trustees will be expected to ask sharper questions and demonstrate greater insight into insurance and governance matters.

• Managing Agents must be ready to explain anomalies, resolve administrative disputes, and support decision-making with transparent, auditable data.

• Insurance Brokers must go beyond selling policies — offering trusted guidance, strategic interpretation, and a deep understanding of scheme-specific risks.

At MONO.insure, we see our role as bridging this gap: combining specialist knowledge of sectional title insurance with modern tools that empower trustees and managing agents to make sound governance decisions.

Risks and Responsibilities

With opportunity comes risk. The integration of AI in scheme insurance and governance raises questions around:

• Data Privacy (compliance with POPIA when handling personal or financial records)

• Transparency (maintaining clear audit trails of AI-assisted decision-making)

• Bias and Manipulation (trustees may present AI-driven but one-sided arguments, requiring critical evaluation)

• Accountability (clarifying who is responsible if AI-driven insights prove flawed)

These challenges highlight that AI should be a tool, not a substitute for judgment.

Professional expertise remains essential in interpreting outputs and applying them in the best interests of the scheme.

So, In the end....

The rise of AI represents both disruption and opportunity in the sectional title insurance space. Trustees, managing agents, and brokers who embrace it as a partner will strengthen governance, reduce risk, and protect scheme stakeholders more effectively.

At MONO.insure Brokers, we’re committed to helping schemes navigate this new reality. AI may provide the insights, but it’s trusted relationships, specialist knowledge, and ethical judgment that will continue to make the difference.

👉 Read Professor Graham Paddock’s original article here: How Generative AI is Reshaping Community Scheme Management