Australian Reinsurance Pool Corporation (ARPC) is a public financial corporation established by the Terrorism and Cyclone Insurance Act 2003 (TCI Act). ARPC administers the Terrorism Reinsurance Pool (terrorism pool) and the Cyclone Reinsurance Pool (cyclone pool).
Reinsurance is insurance for insurers. Reinsurance is the practice whereby insurers transfer portions of their risk portfolios to reinsurers to limit their own exposures and claims. Reinsurance allows insurers to remain financially stable, particularly following a large event or series of events.
Responsibility for setting insurance premiums stays with insurers, and they are responsible for commercial decisions on how they set them.
For the terrorism pool, ARPC’s Minister must officially announce a Declared Terrorist Incident (DTI) before the provisions within the Terrorism and Cyclone Insurance Act 2003 can be triggered. Once a DTI is declared, The TCI Act overrides terrorism exclusion clauses in eligible insurance contracts, enabling coverage of eligible terrorism losses arising from a declared terrorist incident. For more information see the terrorism pool page.
For the cyclone pool, Australia’s weather agency, the Bureau of Meteorology (BoM), will observe when a cyclone event begins and ends. The cyclone pool will cover claims for cyclone and related flood damage arising during a cyclone event, which lasts from the time a cyclone begins until 48 hours after the cyclone ends. For more information, see the cyclone pool page.
The terrorism pool covers commercial and industrial buildings, mixed-use buildings with a floor space of at least 20 per cent used for commercial purposes, and high-value buildings with a sum insured of at least $50 million, whether used for commercial or other purposes.
Coverage includes fixtures, the contents within those buildings and associated business interruption. Eligible property also includes commercially owned infrastructure such as roads, tunnels, dams, railways, and pipelines as well as sites covered by a construction policy. Farms can also obtain cover if they hold insurance against business interruption.
The terrorism pool also covers declared acts of terrorism described as “chemical”, “biological”, “polluting”, “contaminating”, “pathogenic”, “poisoning”, or words of similar effect.
The cyclone pool is designed to lower insurance premiums for homes (including strata) and small businesses with high risk of damage due to cyclone and related flood, by reducing the cost of cyclone reinsurance, which is a significant cost component of premiums for these policies.
No. The cyclone pool is a reinsurance arrangement between insurers and ARPC.
Home, residential and commercial strata, and small business policies. This includes:
Policyholders in northern Australia with high cyclone and related flood damage risk should be offered reduced premiums by their insurer when they renew their policy once their insurer has joined the cyclone pool. To check if an insurer has joined the pool, click here.
No. Consumers’ claims will be managed by their insurer in the usual manner.
ARPC has a contractual relationship to reimburse Insurers for the cyclone pool eligible claims they pay to policyholders.
The amount of claim an insurer pays to a policyholder will depend on the conditions of the insurance policy. Each Insurer underwrites their own policy and there will be variations between policies available to consumers. For this reason, neighbours affected by the same loss event but insured with different insurers may experience different claims outcomes, depending on the level of cover offered by the insurers.
Consumers should study the Product Disclosure Statement to check what level of coverage they have with their Insurer.
RISe is ARPC’s Terrorism Reinsurance Pool (terrorism pool) insurer customer portal, which allows insurer customers to lodge their company information in a secure and user-friendly environment.
PACE is ARPC’s Cyclone Reinsurance Pool (cyclone pool) insurer customer portal, which allows cyclone pool insurer customers to lodge their company information in a secure and user-friendly environment.