Home insurance premiums in Australia’s highest cyclone risk zones have dropped by 37% since the federal government’s reinsurance scheme took effect in October 2022, according to data released by the Australian Reinsurance Pool Corporation (ARPC) on May 19. The figures come from ARPC’s latest Premium Assessment, which draws on insurer quote data to track pricing and availability trends across the country’s cyclone-exposed regions. The release is one of four substantive updates ARPC has published since April, collectively covering claims payments, portfolio size, seasonal loss estimates, and affordability trends.
Beyond premium levels, the data shows that the number of available policies in the highest-risk areas rose 27% from October 2022 to the assessment date, tracking the gradual expansion of insurer participation in the scheme. ARPC attributed the trend to the pool’s structure, which provides government-backed reinsurance to participating insurers at rates designed to make covering high-risk properties more commercially viable.
The assessment found that pricing movements in medium to high-risk areas were most directly linked to pool participation. In lower-risk regions, premium changes tracked broader market conditions rather than the scheme’s influence. For small and medium-sized enterprises, premium reductions were evident in higher-risk segments, though business interruption cover showed more varied movement, reflecting factors outside the pool’s scope.
ARPC chief executive Dr. Christopher Wallace said the data reflects conditions in regions where affordability has been a persistent issue. “Insurance affordability remains a significant and ongoing challenge for many Australians, particularly in regions facing heightened exposure to natural hazards. 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,” Wallace said. He described the pool as one part of a broader policy framework. “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 assessment findings will feed into future pricing reviews of the scheme.
Separate from the affordability data, ARPC announced on April 8 that cumulative claim payments since the pool’s launch had exceeded $1 billion – distributed across 20 declared cyclone events and covering home, strata, and SME policyholders in northern Australia. The bulk of that figure stems from Tropical Cyclone Alfred, which produced the pool’s largest single-event loss. Alfred’s scale drove much of the 2024-25 season’s estimated $1.591 billion in ultimate incurred losses – by far the heaviest year on record for the pool.
Wallace said the payments record shows the scheme functioning on both sides of its mandate. “The cyclone pool was established to lower insurance premiums for households, small businesses, and strata properties in medium-to-high cyclone risk areas by providing insurers with affordable, government-backed reinsurance. This milestone demonstrates that the pool is working as intended – delivering timely, reliable support following severe cyclone events,” he said. He also pointed to the pace at which the scheme has grown since its first declared event. “From our first declared event, with Tropical Cyclone Gabrielle impacting Norfolk Island in 2023, the cyclone pool has scaled rapidly. It has demonstrated its capability to support insurers through multiple events while maintaining operational integrity and financial strength,” he said.
Quarterly statistics covering the period to Dec. 31, 2025, published May 1, show the pool’s current footprint. ARPC reinsures approximately 3.2 million properties – more than 3 million residential, 73,000 strata buildings, and over 100,000 SME properties. Total annual premiums pooled across all three categories sit at roughly $653 million. Per-policy averages were $189 for home, $778 for strata, and $237 for SME, with little movement across recent quarters.
Cyclone wind cover is universal across all properties in the pool; flood cover applies to about 87% of home policies, while storm surge coverage varies by location. Claims received through Dec. 31, 2025, numbered more than 126,000, with a net incurred value of approximately $1.4 billion. On the mitigation side, $9 million in premium discounts had been applied to in-force policies, with ARPC noting that uptake is expected to grow as insurers refine data collection and policyholders adjust to the scheme’s pricing signals.
A May 11 update on the 2025-26 cyclone season placed current estimated ultimate losses at approximately $267 million across nine declared events, based on a central estimate of $195 million and a risk margin of $72 million. ARPC emphasised that all figures are unaudited actuarial estimates subject to further revision. Despite the volume of activity, no single storm drove outsized losses at the portfolio level, partly because most systems tracked away from densely populated areas. Two events – Cyclone Fina and Cyclone Koji – generated the largest individual loss estimates, at $84 million and $53.5 million, respectively.
Tropical Cyclone Narelle required two separate declarations under the legislative framework, a result of its extended and geographically dispersed path. Wallace addressed the complexity directly. “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.
Wallace said the season’s overall result did not alter ARPC’s assessment of the pool’s durability. “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. Importantly, the pool has continued to operate as intended – providing certainty of cover, supporting insurer balance sheets, and reducing reliance on global reinsurance markets,” he said. Across all seasons since inception, the pool’s total estimated ultimate losses stand at approximately $2 billion, with Alfred accounting for the dominant share. The 2025-26 season adds a comparatively smaller increment to that cumulative figure. ARPC said it will continue monitoring loss development as outstanding data for several events, including Narelle, is received and processed.
