ARPC publishes Cyclone Reinsurance Pool Premium Rates

ARPC publishes Cyclone Reinsurance Pool Premium Rates

22 September 2025

ARPC has published revised premium rates for the Cyclone Reinsurance Pool (cyclone pool). The new premium rates (premium rates v4.0) will be effective from 1 April 2026, and will replace premium rates v3.0 (effective since 1 April 2025).

2025 Pricing Review Scope

The 2025 Pricing Review of the cyclone pool premium rates targeted the following:

• Ensuring premium rates are still meeting legislative objectives for the policies that are now reinsured by the cyclone pool.
• Comparison of historical experience to the modelled costs used to set cyclone pool premium rates.
  
• Review of early learnings from Tropical Cyclone (TC) Alfred including a review of the climate science relating to tropical cyclones.
• Introduction of premium discounts for SME properties that have undertaken risk mitigation activities.
• Maintenance of the pricing algorithm to rate new addresses and postcodes registered since the previous review.

The updates to premium rates were subject to an industry consultation process. The feedback from the consultation has been considered as part of this review.

2025 Pricing Review Conclusions

The assessment of the cyclone pool premiums indicated that the cyclone pool premiums remain adequate to offset expected costs over the long-term.

The estimated total premiums for the cyclone pool as at 1 April 2025 was $626 million. The estimate for 1 April 2026 is $637 million, reflecting a 2% increase driven by inflation in sums insured and a change in mix of reinsured properties.

ARPC has reviewed premium rates by cyclone risk level. Current premium rates still achieve overall adequacy while also delivering the most benefit to medium and high risk properties, as intended by the legislation. The changes to the premium algorithm to SME buildings introduced at this review are intended to incentivise mitigation.
Similar events to TC Alfred are currently allowed for in the catastrophe models used to inform the cyclone pool premium rates.

Overall, the conclusion from the 2025 Pricing Review is that the legislative objectives of the cyclone pool continue to be met and, in the case of the SME mitigation discounts, further meet those objectives.

SME mitigation discounts

SME premium discounts have been introduced for qualifying mitigation activities, which include:

• Roof mitigation activities (including a full roof structure retrofit, the addition of fastened flashings on metal roofs and sarking under the tiles for tile roofs).
• Installation of permanent protection (for example shutters or screens) on all windows.
• Retrofit of vehicle access doors on low-rise properties (built prior to 1982).
• Installation of gutter overflows.
• External door mitigation activity including solid cores on all timber door and external protection on balcony doors.

Pricing responsibility stays with insurers

Responsibility for setting insurance premiums stays with insurers, and they are responsible for commercial decisions on how they set them. The Australian Competition and Consumer Commission will use its price monitoring powers to collect data to assess whether the savings from the cyclone reinsurance pool are being passed through to policyholders.

Quote attributable to ARPC Chief Executive Dr Christopher Wallace:

"The updated premium rates ensure the cyclone pool remains financially sustainable and responsive to evolving risks. These rates continue to meet legislative objectives, while the introduction of SME mitigation discounts recognises and rewards proactive risk reduction efforts. We thank insurers for providing their feedback during the consultation and we remain focused on supporting communities in cyclone-prone regions."

For media inquiries, please contact Alexander Drake, Head of Public Affairs and Communications on (02) 8223-6777 or [email protected].

Download the Premium Determination Report