Consultation on Cyclone Reinsurance Pool premium rates
1 October 2026Â
Australian Reinsurance Pool Corporation (ARPC) is consulting on the draft Version 5 premium rates for the Cyclone Reinsurance Pool, proposed to apply from 1 July 2027.
The 2026 Pricing Review is the most comprehensive reassessment of modelled cyclone pool cost and premium rates since 2022. It updates ARPC’s assessment of cyclone risk and considers how premiums should be allocated across properties in line with the pool’s legislative pricing objectives.
The proposed rates are draft and are not final. ARPC is seeking feedback from participating insurers and broader stakeholders. Following consultation, ARPC will consider all feedback before finalising the rates, which are currently proposed to commence from 1 July 2027.
Key draft outcomes
The review estimates annual cyclone claims and expenses at $786 million on the pricing basis used for the proposed rates. On a comparable basis, this is around 3% higher than the previous assessment, mainly due to updated cyclone-related riverine flood modelling and improved property location information.
Under the draft rates, the projected annual cyclone pool premium collected from insurers in total would increase by $22 million, or 2.9%, to $770 million per annum. This would improve long-term premium adequacy from 95.1% to 97.9%, within ARPC’s target range of 95% to 105%.
The proposed changes also rebalance premiums across different levels of cyclone risk. Average cyclone pool premiums would decrease for medium and high risk properties and increase modestly for minimal and low risk properties.
Cyclone pool premiums are reinsurance premiums paid by insurers to ARPC and are only one component of the total insurance premium paid by policyholders. Insurers continue to determine the premiums they charge customers, and individual outcomes may also reflect other insurance costs and factors.
Purpose of the 2026 Pricing Review
The review assesses whether cyclone pool premium rates continue to meet the pricing objectives set out in the Terrorism and Cyclone Insurance Act 2003. These include:
- ensuring premiums are sufficient over the longer term to cover or offset cyclone claims and expenses
- keeping premiums as low as possible for properties with medium and high cyclone risk
- maintaining incentives to reduce and mitigate cyclone risk
- keeping lower-risk premiums comparable with private market reinsurance.
The review also considered updated catastrophe modelling, insurer exposure and claims data, underinsurance, claims handling costs and relevant climate modelling.
Request for feedback
ARPC invites feedback on the current cyclone pool premium rates and the draft Version 5 changes, including evidence about premium outcomes or other matters that should be considered before the rates are finalised. Written submissions on the premium rates should be sent via email, to [email protected] by the close of business on Friday, 6 November 2026. Consultation responses will be considered by ARPC and will not be published.
Following consultation, ARPC will consider all feedback before finalising the rates, which are currently proposed to commence from 1 July 2027.
For media inquiries, please contact Alexander Drake, Head of Public Affairs and Communications on (02) 8223-6777 or [email protected]