Australian Reinsurance Pool Corporation (ARPC) is a public financial corporation established under the Terrorism and Cyclone Insurance Act 2003.

What ARPC does

ARPC helps make insurance more available and affordable by supporting insurers through two reinsurance pools:

• Terrorism Reinsurance Pool (since 2003)
  Covers commercial property and business interruption losses caused by a declared terrorist incident.
• Cyclone Reinsurance Pool (since July 2022)
  Covers cyclone and cyclone-related flood damage.

These pools provide insurers with access to reinsurance (insurance for insurers), helping them manage large or unexpected losses.

Why ARPC was established

After the September 11, 2001 terrorist attacks in the United States, many insurers stopped offering terrorism cover. This created a risk that businesses and infrastructure projects in Australia would not be able to obtain insurance.

In response, the Australian Government established ARPC to ensure this cover remained available and to support continued investment in the economy.

More recently, the cyclone pool was introduced to address the rising cost of insurance in cyclone-prone areas.

How the cyclone pool helps consumers

The cyclone pool offers reinsurance to insurers at a lower cost than the commercial market. This can reduce insurers’ costs and may help lower premiums for policyholders.

However, the price you pay for insurance depends on a range of factors, not just reinsurance costs.

How the pools work

The terrorism pool and cyclone pool operate differently.
For more detailed information, visit the Cyclone Pool and Terrorism Pool pages.

What is reinsurance?

Reinsurance is insurance for insurers.

It allows insurers to transfer some of their risk to a reinsurer like ARPC. This helps insurers stay financially stable, especially after major events such as natural disasters or terrorist incidents.

Who does ARPC work with?

ARPC works with insurance companies, not directly with consumers.

To access ARPC’s support, insurers must:

• Provide insurance for property located in Australia, and
• Have a Reinsurance Agreement with ARPC

Insurers pay premiums to ARPC to transfer their terrorism and cyclone risks.

If you make a claim:

• Your insurer manages your claim directly, based on your policy terms
• The insurer may then recover some of the cost from ARPC

Do insurers set their own premiums?

Yes. Insurers are responsible for setting the premiums they charge policyholders.

For the cyclone pool, the Australian Competition and Consumer Commission (ACCC) monitors insurers to ensure that any savings from lower reinsurance costs are appropriately passed on to customers.