The Australian Reinsurance Pool Corporation (ARPC), the government-owned agency that manages Australia’s terrorism and cyclone reinsurance arrangements, has released its latest Premium Assessment, reporting continued improvements in insurance affordability and access across areas with the highest cyclone risk.
According to ARPC, average home insurance premiums in the highest-risk cyclone regions have declined by 37% since the Cyclone Reinsurance Pool commenced in October 2022.
The corporation also stated that insurance availability in those regions has increased by 27% over the same period, which ARPC attributed to growing insurer participation in the scheme.
ARPC Chief Executive Dr. Christopher Wallace said the latest findings indicate the pool is helping address insurance affordability pressures in communities exposed to severe weather risk.
“Insurance affordability remains a significant and ongoing challenge for many Australians, particularly in regions facing heightened exposure to natural hazards,” Dr. Wallace commented.
“These results show the cyclone pool is providing practical support where it is needed most by helping to reduce premiums and improve access to cover in higher cyclone risk areas.”
ARPC said conditions in higher-risk regions had remained relatively steady over the past six months, with both premiums and insurance availability broadly stable despite ongoing pressure within domestic and international insurance markets.
Based on insurer quotation data, ARPC’s assessment found the strongest premium reductions occurred in medium and high-risk regions, which the corporation said reflects the intended focus of the pool. In lower-risk areas, ARPC noted that pricing movements were more closely connected to wider insurance market trends than to the operation of the scheme itself.
The corporation also reported similar outcomes for small and medium-sized enterprises, with premium reductions recorded in higher-risk categories after insurers joined the pool. ARPC added that changes in business interruption premiums had been less consistent and continued to reflect broader market influences.
The Cyclone Reinsurance Pool was introduced to improve insurance outcomes in cyclone-prone regions by lowering insurance costs in higher-risk areas while keeping premiums in lower-risk markets aligned with broader industry settings.
Dr. Wallace said the assessment highlights the role of the pool within wider efforts to improve insurance outcomes for vulnerable communities.
“The cyclone pool is one important part of a wider response to improving insurance outcomes in vulnerable communities,” he added.
“It is contributing to more stable and accessible insurance markets in high-risk areas, alongside ongoing work across government and industry to strengthen resilience and reduce long-term risk.”
ARPC said the latest assessment findings would be used to support future reviews of the scheme’s pricing structure.
