The Australian Competition and Consumer Commission (ACCC) has published its fifth and final mandatory insurance monitoring report, finding that Australia’s cyclone reinsurance pool has reduced premiums in high-risk areas while nationwide affordability pressures remain. With the ACCC’s oversight role closing on June 30, 2026, and no equivalent replacement announced, a statutory review of the legislation underpinning the pool is the only formal accountability mechanism currently in place.
The Australian government launched that review – the first statutory examination of the Terrorism and Cyclone Insurance Act 2003 since the cyclone pool was established in 2022 – in September 2025. Announced by Assistant Treasurer Dr Daniel Mulino, the review is specifically examining whether the pools are meeting their purpose, whether mitigation incentives are being maintained, and whether the Australian Reinsurance Pool Corporation’s (ARPC) governance and administration remain appropriate. Submissions closed on Nov. 11, 2025, and the review remains ongoing.
“Through our insurance monitoring work, the ACCC has analysed the impact of the pool and provided greater transparency on how savings from the pool are passed on to policyholders. This oversight can encourage more accountable behaviour from insurers,” ACCC Commissioner Anna Brakey said.
The ACCC measured premiums on a per-$100,000 sum insured basis, comparing policyholder renewal data before and after each insurer’s pool entry date. In the first year after insurers joined the pool, average premiums in higher cyclone risk areas had fallen 11% for home insurance, 8% for strata insurance, and 24% for small business insurance. By contrast, in areas at no risk of cyclones, home insurance rose 6%, strata insurance rose 2%, and small business insurance rose 10% in that same period.
Those reductions held over time. Up to two years after insurers joined the pool, home insurance premiums had reduced 14% and small business insurance reduced 31% compared to pre-pool prices. The largest reductions have been for households and small businesses at the greatest risk of cyclones, which represent 2% of policies nationally. Average premiums per $100,000 sum insured fell in Karratha (down 15%), Mackay (down 14%), Cairns (down 12%), and Townsville (down 3%).
ARPC’s May 2026 Premium Assessment reported a larger cumulative figure – average home insurance premiums in the highest cyclone risk areas have fallen by 37% since October 2022. The gap between that figure and the ACCC’s 14% reflects different methodologies: ARPC tracks standardised online new business quotes from October 2022 to January 2026, while the ACCC measures actual renewal outcomes over a shorter post-entry window on existing policyholders. Both are disclosed in their respective reports.
The pool’s targeted design means its premium relief does not reach the 98% of policies nationally with no elevated cyclone risk. The average premium in 2024-25 for home and contents insurance was almost $5,000 in north Western Australia, over $3,500 in the Northern Territory, and more than $3,100 in north Queensland. In the rest of Australia, average premiums rose 10% to $2,310 between 2023-24 and 2024-25.
Those increases are driven by factors outside the pool’s remit. In 2023, global reinsurers raised costs to 20-year highs, with Australian insurers facing increases of up to 30%, according to the ICA’s 2025 industry snapshot. Building material costs are approximately 30% higher than three years ago, according to the same source. State insurance taxes collected approximately $8.6 billion in 2023-24 – $3.5 billion more than the general insurance industry's total profit for that year. A consumer survey commissioned for the ACCC’s final report found that regardless of the cyclone risk they face, around half the households surveyed Australia-wide rated their home insurance as unaffordable or barely affordable.
ARPC chief executive Dr Christopher Wallace acknowledged the pool’s limits. “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,” Wallace said.
The pool was also designed to draw more insurers into northern Australian markets. That objective has not been met. No new insurers have entered northern Australian markets since the pool was established, and insurers still perceive a range of barriers to entering or expanding beyond the cyclone risk addressed by the pool. The ICA’s 2025 industry snapshot confirms that 11 insurers continue to offer cover in the Townsville region, indicating the market has not contracted – but new entry has not occurred.
Three years is an insufficient horizon against which to assess whether the pool has achieved its market competition objective. Flood Re – the UK government-industry flood reinsurance scheme established under the Water Act 2014 – reports in its 2024-25 annual report that after a decade of operation, 99% of high-risk UK householders can now obtain quotes from 15 or more insurers on price comparison websites. Whether Australia’s pool is on a comparable trajectory is one of the questions the statutory review is positioned to examine.
ARPC’s 2024-25 Annual Report records an operating deficit of $891 million for that year, driven by Tropical Cyclone Alfred – the largest single event since the pool commenced. That deficit does not signal insolvency: each cyclone season’s losses are assessed independently, and the pool is designed to accumulate surpluses in low-loss years to offset deficits in active ones. ARPC’s 2025 Financial Outlook Report forecasts a return to a small positive operating result for 2025-26 to 2027-28, with all obligations in 2024-25 met from the pool’s own assets without drawing on the $10 billion Commonwealth government guarantee. For the 2025-26 season, assessed separately, ultimate incurred losses are currently estimated at approximately $267 million across nine declared cyclone events.
More insurers now recognise private mitigation measures, but some are yet to implement a mitigation framework, and the clarity of information provided to consumers about private mitigation varies. As of Dec. 31, 2025, $9 million in mitigation discounts had been applied to in-force premiums – less than 1.4% of the pool’s approximately $653 million annual premium base. A 2025 analysis of six international government-backed catastrophe schemes, commissioned by Flood Re and delivered by Swiss Re, found that the most financially resilient schemes combine pricing reviews with dedicated funding for risk reduction measures – a design feature Australia’s pool has not yet matched at scale. “Mitigation remains one of the key factors that will improve the resilience of communities to natural hazards. We found insurers could be doing more to support consumers to understand their options and to recognise the efforts of those who have taken steps to reduce the risk to their property,” Brakey said.
The statutory review now under way is the first formal mechanism through which the pool’s outstanding design questions can be addressed. Its scope – whether mitigation incentives are being maintained and whether the pools are meeting their purpose – maps directly onto the two areas where the ACCC’s final report found the most unfinished work. Its findings will determine whether the scheme continues in its current form, is restructured, or is expanded, making it the most consequential assessment of Australia’s cyclone reinsurance pool since the pool’s establishment in 2022.
