ARPC exposure under state-backed cyclone pool nears A$2.17 trillion

By Ryan Hewlett

Feb 26 - (The Insurer) - The state-backed cyclone pool in Australia now covers over 3.1 million buildings against financial loss from cyclones with an aggregate building exposure of just under A$2.17 trillion ($1.37 trillion) according to new statistics.

The pool is operated by the Australian Reinsurance Pool Corporation (ARPC), who announced the “milestone” in its latest premium and exposure statistics report.

The quarterly report draws on data generated by the cyclone pool, which operates Australia-wide, but targets support to cyclone-prone areas.

As of September 30, 2024 the cyclone pool covered almost A$2.17 trillion of aggregate building exposure under its three classes of business – home, strata (residential and some commercial) and SMEs.

Annual in-force cyclone pool premiums totalled approximately A$532 million for home properties, A$53 million for strata and $24 million for SMEs, it said.

In addition, the pool provides annual discounts to home properties for property level mitigation activities of A$6.6 million.

The cyclone pool was launched by ARPC in 2022 and is intended to help make insurance more affordable and more available in areas with medium to high cyclone risk.

The pool’s previous quarterly report, published in October 2024 and covering the four months to June 30, revealed that the scheme had reached close to 99 percent market coverage of eligible insureds across the northern parts of the country by sum insured or premium.

As previously reported, the pool is intended to be cost-neutral to the government over the long term, and is supported by an annually reinstated $10 billion Commonwealth guarantee. It was launched by ARPC in 2022 under the amended Terrorism and Cyclone Insurance Act 2003.