The Australian Reinsurance Pool Corporation’s (ARPC) cyclone reinsurance pool has paid more than $1 billion in claims since it began, indicating the scale of cyclone‑related losses being transferred from private insurers to the government‑backed scheme. Since its launch on July 1, 2022, the pool has responded to 20 declared cyclones and associated events, providing reinsurance for residential, small and medium enterprise (SME), and strata policies concentrated in northern Australia. A large share of claims activity is linked to Tropical Cyclone Alfred in the 2024-25 season, which has driven both claim volumes and incurred losses.
ARPC chief executive Christopher Wallace said the claims milestone illustrates how the pool is being used in cyclone‑exposed regions. “Passing $1 billion in claim payments is a significant achievement for the scheme, and more importantly, for the communities it was designed to support,” Wallace said. He noted that the pool was set up to reduce premiums in medium‑to‑high cyclone risk areas by offering participating insurers access to Commonwealth‑backed capacity. “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.
Wallace said the broader focus remains on recovery following severe weather. “As we acknowledge this achievement, it’s important to remember the people and communities who have been displaced, disrupted, or have lost so much as a result of these disasters. Our role is to ensure the cyclone pool delivers reliable support when it’s needed most and help those communities recover and strengthen over time. 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.
ARPC’s latest quarterly statistics, as of Sept. 30, 2025, show that the cyclone pool reinsures about 3.2 million buildings across home, strata, and SME segments. For the September 2025 quarter, total annual cyclone pool premium was $648 million. Average annual premiums via the pool were $187 for home, $761 for strata, and $238 for SME risks. Premium levels remain highest in cyclone‑prone areas such as Mackay, Proserpine, and offshore islands in Queensland, as well as Cairns, Kununurra-Broome, and the Pilbara. These regions sit in higher wind risk bands, reflecting modelled cyclone frequency and severity. Across all segments reinsured by the pool, 100% of risks have wind cover. Flood and storm surge cover varies by portfolio and region, with the highest incidence of cyclone‑related flood cover reported in Far North Queensland and Northern Territory Home portfolios. This mix shapes retained exposures and influences broader catastrophe reinsurance structures.
As of Oct. 31, 2025, before the latest update, the cyclone pool had received 119,505 claims. At that time, gross paid claims totalled $605 million, and net incurred losses stood at $1.29 billion. Cyclone Alfred dominates the loss profile, accounting for more than 109,000 claims and $1.15 billion in net incurred losses. Claims from Cyclones Jasper, Kirrily, Sean, and Zelia also contribute to aggregate experience. Subsequent development on existing claims and additional events since October 2025 has increased total paid amounts to more than $1 billion. The growing claims dataset is being used across the market to analyse cyclone risk transfer, retentions, and the interaction between the pool and private catastrophe reinsurance programs.
Separate premium assessment work released on Oct. 15, 2025, indicates that the cyclone pool is associated with changes in pricing and quote patterns in higher‑risk bands. Using new business quote data from seven major insurers, ARPC reported that average home insurance premiums in the highest cyclone risk bands have fallen by 37% since the pool was introduced. Over the same period, quote success rates in those bands increased from 66% before the pool to 84% as at April 2025. Medium‑risk areas also recorded premium reductions and higher quote availability.
For SMEs in high‑risk areas, buildings and contents premiums decreased by 48%, with a further 25% reduction observed in the six months to April 2025. ARPC’s analysis found that, since its previous assessment in January 2025, average home premiums and quote success rates have remained broadly stable in higher risk regions. “These results demonstrate the cyclone pool’s continued success in improving insurance affordability and access for households and small businesses in cyclone-prone regions,” Wallace said.
Mitigation is embedded in the cyclone pool’s design. As of Sept. 30, 2025, ARPC reported $8.6 million in mitigation‑linked premium discounts across participating portfolios. Discounts apply where properties adopt specified measures such as roller door bracing, window protection, roof tie‑downs, and full roof replacement. ARPC expects take‑up of these measures to increase as insurers refine data collection on property‑level attributes and as policyholders respond to price signals, including those aligned with the Queensland Household Resilience Program.
The cyclone pool operates under the Terrorism and Cyclone Insurance Act 2003 and is intended to be cost‑neutral to the Australian government over the long term. It is backed by a $10 billion annually reinstated Commonwealth guarantee and provides cover for cyclone and cyclone‑related flood damage for eligible home, strata, and SME properties. Premium rates are set by ARPC in line with legislative objectives on affordability and availability. ARPC has identified priorities that include enhancing operational efficiency, maintaining prompt claims handling, and supporting targeted mitigation to influence long‑term risk profiles in cyclone‑exposed regions. The structure and performance of the cyclone pool remain key considerations in pricing, capacity deployment, and capital management in northern Australia.
