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The Cyclone Pool

Improving insurance affordability for northern Australia

The Government has implemented a reinsurance pool for insurance companies to transfer their risk for cyclones and cyclone-related flood damage, called the Cyclone Reinsurance Pool (cyclone pool), which is backed by a $10 billion Government guarantee. The cyclone pool is a reinsurance arrangement between insurers and ARPC. The cyclone pool covers household, strata, and small business property insurance policies. ARPC commenced operations of the cyclone pool from 1 July 2022. The cyclone pool operates Australia wide, but targets support to cyclone-prone areas, and provides reinsurance for insurers operating in those areas.

ARPC cyclone pool introductory video

The below video explains key elements of the cyclone pool as well as the declaration of cyclone events. Additional information videos are available to ARPC’s insurer customers outlining how to use PACE, lodging a premium bordereau and claims bordereau.

For further information on how to access these videos please contact ARPC.

Driving down premiums for cyclones and related flood damage

The cyclone pool covers cyclone and related flood damage. This includes wind, rain, rainwater, rainwater run-off, storm surge, and riverine flood damage caused by a cyclone.

Australia’s weather agency, the Bureau of Meteorology (BoM), will observe the date and time when a cyclone begins and ends, and in some cases re-intensifies. Based on the BoM notification, the ARPC must then declare the start or end of a cyclone event.

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 – this is known as the cyclone event period.

Benefitting households, strata, and small businesses

The cyclone pool covers home, strata, and small business policies. This includes:

  • residential home and contents, including landlord insurance and farm residential cover.
  • residential strata, including mixed-use strata schemes (where 50 per cent or more of floor space is used mainly for residential purposes); and
  • commercial property policies with $5 million or less total sum insured across risks covered by the pool (property, contents, and business interruption).

Insurers will be required to participate to maximise premium savings

Participation is mandatory for general insurers with eligible policies. Large insurers joined the cyclone pool. Small insurers will have to join by 31 December 2024. All insurers can voluntarily join from the commencement date. Policyholders will continue to have freedom to choose their insurer, and insurers will continue to manage all claims.

Backing from a $10 billion Government guarantee

The cyclone pool is supported by an annually reinstated $10 billion Government guarantee. Any shortfall in reserves built up over time will be paid for through the Government guarantee.

If the $10 billion guarantee is likely to be exceeded by a single cyclone event or series of cyclone events within a single year, the Government will increase the guarantee to support the cyclone pool to meet all its obligations.

The cyclone pool will charge premiums to insurers

The cyclone pool is funded by charging reinsurance premiums to insurers that are consistent with the expected claims and operating expenses for the pool.

The pricing formula uses property-level data such as geography, building characteristics, and mitigation. It has been developed in line with the principles that the cyclone pool will:

  • be cost-neutral to Government over the longer term
  • lower the reinsurance cost for most policies with medium-to-high exposure to cyclone risk
  • have minimal impact on policy premiums for lower cyclone-risk properties and
  • maintain incentives for risk reduction and offer discounts for properties that undertake mitigation.

The ACCC will monitor insurer premiums to ensure savings are passed through to policyholders

The Australian Competition and Consumer Commission (ACCC) has been directed by the government to monitor pricing of insurers as a consequence of joining the cyclone pool. It will collect data to evaluate the impact of the cyclone pool and assess whether the savings from the cyclone pool are being passed through to policyholders.

Supporting mitigation and informing natural disaster planning

The cyclone pool offers premium discounts for home policies that have undertaken flood and cyclone mitigation activities. Over time, mitigation discounts will also be offered for SME and Strata policies.  Additionally, the ARPC will collect data through the cyclone pool that will help the Government to plan its response to natural disasters.


Insurer onboarding

Insurers can now enter into a Cyclone Reinsurance Agreement with ARPC. Learn more about the transition process. Learn more about joining the cyclone pool.

Cyclone Insurer Portal (PACE)

PACE is ARPC’s cyclone pool insurer customer portal, which allows Cyclone Pool Insurer customers to lodge their company information in a secure and user-friendly environment.


Insurer customer logins to ARPC

Terrorism Insurer Portal (RISe)

RISe is ARPC’s Terrorism Reinsurance Pool (terrorism pool) insurer customer portal, which allows terrorism pool insurer customers to lodge their company information in a secure and user-friendly environment.

Cyclone Insurer Portal (PACE)

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.