Cyclone pool remains financially sound: 2026 Financial Outlook Report
21 October 2026
Australian Reinsurance Pool Corporation (ARPC) has published its 2026 Cyclone Reinsurance Pool Financial Outlook Report, finding the cyclone pool remains financially sound and well positioned to meet its legislative obligations.
The report assesses the financial outlook of the cyclone pool as at 30 June 2026, including premium and liability adequacy, financial performance, capital management and the key risks that could affect the pool in future.
The cyclone pool recorded a $701 million positive operating result in 2025–26, following a $1.2 billion negative operating result in 2024–25. The result was driven by lower claims costs during the 2025–26 cyclone season and a reduction in provisions for earlier events, mainly as uncertainty around claims from Tropical Cyclone Alfred reduced.
ARPC Chief Executive Dr Christopher Wallace said: “The significant movement between the past 2 financial years demonstrates the inherent volatility of cyclone risk and why the financial position of the pool needs to be considered over the longer term.”
“The cyclone pool is designed to absorb this volatility, while maintaining its ability to meet claims and supporting insurance affordability in areas with medium to high cyclone risk.”
There were 9 Declared Cyclone Events during the 2025–26 season, 7 of which resulted in claims to the cyclone pool. Claims costs for the season were $203 million, below the modelled long-term Average Annual Loss of $638 million. Actual claims can vary significantly from this long-term average, reflecting the inherent variability of cyclone events.
As at 30 June 2026, the cyclone pool had returned to a broadly neutral financial position, with net liabilities of $33 million compared with net liabilities of $734 million a year earlier. ARPC assessed that claims reserves remain appropriate and no capital management action is currently recommended.
Premiums remain within target range
The report also finds that cyclone pool premiums continue to meet the legislative objectives overall. The estimated premium adequacy ratio is 95.1%, which is at the lower end, but within ARPC’s target range of 95 to 105%.
The 2026 Pricing Review is considering modest changes to premium rates to reflect updated estimates of cyclone risk and exposure, while supporting the pool’s objectives of affordability, premium stability and long-term cost neutrality.
Annual premium discounts for eligible Home mitigation measures increased from $7.9 million to $9.4 million as at 31 March 2026. Mitigation discounts are now available across Home, Strata and SME properties, with ARPC continuing to monitor their take-up.
“A key focus for the cyclone pool continues to be supporting investment in measures that reduce cyclone risk and improve the resilience of properties,” Dr Wallace said.
Inflation and catastrophe risk remain important
The report identifies catastrophic cyclone events and inflation as key risks to the financial outlook, with ARPC continuing to monitor construction costs, climate risk, insurance participation and changes in the pool’s exposure.
For media inquiries, please contact Alexander Drake, Head of Public Affairs and Communications on (02) 8223-6777 or [email protected].