The Cyclone Reinsurance Pool, a reinsurance arrangement between insurers and Australian Reinsurance Pool Corporation (ARPC), has significantly reduced insurance premiums and improved insurance availability for Australians living in cyclone-prone areas, according to a recent analysis.
Having started operations on 1 July 2022 and backed by a $10 billion Government guarantee, the cyclone pool enables insurance companies to transfer their risk associated with cyclones and cyclone-related flood damage, covering: household, strata, and small business property insurance policies,
In its 2025 Premium Assessment, based on quarterly insurer quote data across seven major brands and covering over 4,500 risk profiles, ARPC has revealed its most recent findings.
The report’s key findings include a remarkable average reduction in home insurance premiums for the highest cyclone risk areas, which have decreased by an average of 39% from pre-cyclone pool levels to January 2025. Medium-risk properties have also experienced notable savings.
It was also found that Small and medium enterprises (SMEs) in high-risk areas are benefiting, with 31%premium reductions for Buildings and Contents cover.
Moreover, quote success rates for home insurance has increased across all risk bands, with the greatest improvements in high-risk areas (66% pre-cyclone pool compared to 84% in January 2025), indicating greater insurer appetite to provide coverage in cyclone-prone regions.
These results highlight the cyclone pool is achieving its core objectives under the Terrorism and Cyclone Insurance Act 2003 – in improving affordability and availability for properties most exposed to cyclone risks.
ARPC Chief Executive, Dr Christopher Wallace said: “Since its establishment, the cyclone pool has played a vital role in helping ensure that households and small businesses in northern Australia are not left behind.
“By reducing the reinsurance cost burden for insurers, we’ve seen the pool deliver downward premium pressure – making it possible for more Australians to access the protection they need.
“These findings provide a meaningful signal that cyclone pool premium rates are achieving their intended objectives and leading to significant premium reductions for medium and high-risk policyholders.”
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