The Australian Reinsurance Pool Corporation (ARPC) has released its Annual Report for the 2024-25 financial year, providing an update on its financial standing and the operation of the cyclone and terrorism reinsurance pools.
The report shows that ARPC wrote $1.1 billion in gross written premiums and ended the period with net assets of $772 million.
The year was marked by an operating deficit of $891 million, largely attributed to the impact of Tropical Cyclone Alfred, which has been the most significant event for the cyclone pool since its establishment in July 2022.
ARPC chief executive Dr Christopher Wallace commented on the pools’ performance, commented: “Over the past year, the terrorism and cyclone pools have effectively fulfilled their purpose, despite an above average season of tropical cyclone weather.”
According to the report, ARPC declared five cyclone events during the 2024-25 season, with Tropical Cyclone Alfred alone accounting for $53.7 million of the $130.7 million in claims paid out. The estimated total claims cost for Tropical Cyclone Alfred is $1.86 billion.
Wallace described TC Alfred as a key test for the cyclone pool.
“TC Alfred was a pivotal moment for the cyclone pool, serving as a significant test of its resilience and operational effectiveness. The event demonstrated the pool’s preparedness and capacity to respond efficiently to significant weather events,” he said.
Recent quarterly data published by ARPC highlights a substantial increase in claims activity.
For the quarter ending June 30, 2025, the cyclone pool received 111,860 claims, with a combined net incurred value of $1.12 billion. The majority of these claims were linked to ex-Tropical Cyclone Alfred.
The cyclone pool now provides coverage for over 3.2 million buildings nationwide, with annual in-force premiums estimated at $563 million for home insurance, $56 million for strata, and $25 million for small to medium enterprise (SME) properties.
Additionally, ARPC reported $8.2 million in annual discounts for home policies where property-level mitigation measures have been implemented.
The Australian Competition and Consumer Commission (ACCC) released its fourth insurance monitoring report in July, focusing on the cyclone pool’s influence on insurance premiums.
The ACCC observed that the pool has begun to deliver premium reductions for policyholders in cyclone-prone areas.
Since the pool’s establishment, average home and contents insurance premiums in medium-to-high cyclone risk regions have declined by 11% per $100,000 sum insured.
Conversely, premiums for properties with low or negligible cyclone risk have increased by 4% and 7%, respectively.
The most notable premium reductions have occurred in coastal communities such as Mackay, Cairns, and Townsville, where median premiums dropped by around 15%. Karratha also experienced a 9% decrease.
Small business policyholders in cyclone-affected regions saw an average reduction of 24% in premiums, while strata insurance premiums in these areas fell by 7% on average.
Townsville and Karratha reported the largest decreases in strata premiums, at 28% and 23%, respectively.
Despite these reductions, the ACCC noted that insurance costs remain high in northern Australia. The average annual premium for home and contents insurance now exceeds $3,000 in north Queensland and the Northern Territory, and surpasses $4,600 in north Western Australia.
Strata insurance premiums in north Western Australia have risen by 18%, with average costs now above $18,000 per policy.
The ACCC also reported that the cyclone pool has not yet resulted in a significant increase in insurer participation in northern Australia. Since the pool’s introduction, no new insurers have entered the market, and only minor adjustments have been made to underwriting and exposure limits.
In October 2025, the federal government initiated a statutory review of the Terrorism and Cyclone Insurance Act 2003.
The review aims to assess whether the reinsurance pools are meeting their intended objectives and to evaluate the effectiveness of their governance and operational frameworks.
Government analysis indicates that small business marine property insurance policies will remain outside the cyclone pool, as their inclusion is expected to have little effect on affordability and could increase costs.
As of Dec. 31, 2024, all eligible insurers had joined the cyclone pool as required by law. ARPC also reported an increase in terrorism reinsurance agreements, rising to 231 in 2024-25 from 225 the previous year, providing cover for commercial property and business interruption in the event of declared terrorism incidents.
