Cyclone pool drives 39% drop in premiums for high-risk areas

By Ryan Hewlett

May 20 - (The Insurer) - Australia’s state-backed cyclone reinsurance pool has helped cut home insurance premiums for the highest cyclone risk areas by 39% since launch in July 2022, according to new data.

The pool, operated by the Australian Reinsurance Pool Corporation (ARPC), has also helped to secure policyholders with medium-risk properties with “notable savings” while SMEs in high-risk areas have seen premium reductions of 31% for buildings and contents cover.

The figures were published as part of the ARPC’s 2025 premium assessment, and highlight that the pool is delivering significant downward pressure on insurance premiums.

ARPC reported quote success rates for home insurance has increased across all risk bands. The greatest improvements were in high-risk areas. These saw success rise from 66% pre-cyclone pool compared to 84% in January 2025, indicating greater insurer appetite to provide coverage in cyclone-prone regions.

These results highlight the cyclone pool meeting its core objectives under the Terrorism and Cyclone Insurance Act 2003: improving affordability and availability for properties most exposed to cyclone risks.

This assessment is based on quarterly insurer quote data across seven major brands and covering over 4,500 risk profiles. The findings will inform future cyclone pool pricing reviews.

ARPC CEO Christopher Wallace said: “Since its establishment, the cyclone pool has played a vital role in helping ensure that households and small businesses in northern Australia are not left behind.

“By reducing the reinsurance cost burden for insurers, we’ve seen the pool deliver downward premium pressure, making it possible for more Australians to access the protection they need.

“These findings provide a meaningful signal that cyclone pool premium rates are achieving their intended objectives and leading to significant premium reductions for medium and high-risk policyholders.”

ARPC conducted its first premium assessment data analysis in January 2024.