Average premiums in Australia’s highest cyclone risk areas are down 37% from October 2022 levels, and policy availability in those same zones has grown by 27% – gains that have held over the past six months despite sustained pressure across domestic and global insurance markets. The figures, published by the Australian Reinsurance Pool Corporation (ARPC) on May 19, 2026, arrive against a backdrop of ongoing affordability pressures in Australia’s natural hazard-exposed communities, where access to home insurance has been a persistent policy concern.
ARPC’s analysis of insurer quote data shows the premium decreases have landed in medium-to-high-risk zones – the areas the pool was structured to target. In lower-risk regions, price movements have continued to follow general market conditions, with no material pool-driven effect recorded. The 27% increase in policy availability in the highest-risk areas reflects expanded insurer participation in the scheme since its October 2022 launch. ARPC chief executive Dr. Christopher Wallace said the pattern has continued into the current period. “Insurance affordability remains a significant and ongoing challenge for many Australians, particularly in regions facing heightened exposure to natural hazards,” Wallace said.
For small and medium-sized enterprises in higher-risk areas, the assessment identified premium reductions in the period following their insurers’ entry into the pool. Business interruption cover has been less uniform, with pricing continuing to reflect market-wide conditions beyond cyclone-specific risk. ARPC noted those movements are not attributable to the pool’s mechanics.
Wallace described the pool as one component of a broader government and industry effort rather than a standalone mechanism. “The cyclone pool is one important part of a wider response to improving insurance outcomes in vulnerable communities. 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,” he said. ARPC said the current assessment will inform future pricing reviews of the scheme. The corporation did not disclose a timeline for those reviews, though any recalibration of pool pricing would have direct implications for insurers currently participating in the scheme.
On May 11, 2026, ARPC published its 2025-26 cyclone season loss update, providing an early read on claims development. Nine tropical cyclone events were declared during the season, producing estimated ultimate incurred losses of approximately $267 million – comprising a central estimate of $195 million and a risk margin of $72 million. All figures are unaudited actuarial reserving estimates and remain subject to revision as additional claims data comes in.
The season’s volume was above recent norms, though most systems tracked away from major population centres, limiting portfolio-level losses. Excluding the Narelle declarations, which are addressed separately below, the next largest single-event contributors were Tropical Cyclone Fina at an estimated $84 million and Tropical Cyclone Koji at an estimated $53.5 million. No other individual event exceeded $12 million in estimated losses.
The pool’s total estimated ultimate losses since establishment now stand at approximately $2 billion. The 2024-25 season accounts for the bulk of that figure, with Tropical Cyclone Alfred alone generating an estimated $1.58 billion. The 2023-24 season produced approximately $139 million across four declared events. Against that history, the 2025-26 season produced $267 million across nine declared events. Wallace said the season’s outcome was within the corporation’s expectations. “The 2025-26 season was one of the most active in recent years. Despite this, losses remain within expectations and do not change our overall view of the pool’s resilience,” he said.
ARPC declared two separate events for Tropical Cyclone Narelle under the pool’s legislative framework – Narelle, for which no loss data has yet been received, and Narelle 2, which carries an estimated $109 million in losses. Together, the two declarations account for approximately $113.3 million, or roughly 42% of the season’s total estimated losses. The dual declaration reflects the system’s path: Narelle tracked across multiple regions over an extended period, with ARPC determining that the two declarations corresponded to distinct phases of one underlying weather system. For insurers participating in the pool, the treatment of a single meteorological event as two declared events has direct implications for how retentions are applied and how claims are aggregated across the affected period.
Wallace acknowledged the complexity involved. “Narelle followed an unusual and extended path, impacting multiple regions over a prolonged period. While two events were declared in line with the legislative framework, these reflected distinct phases of one underlying weather system. We will continue to work closely with insurers to support recovery, taking a practical approach that reflects both the formal framework and how losses emerge in practice,” he said. Several other events from the 2025-26 season also remain in early stages of loss development. ARPC said it will issue further updates as estimates mature, noting that loss figures – particularly for events with prolonged damage and recovery timelines – may continue to evolve.
