Reinsurance Pools

Cyclone Pool FAQs

This section includes General FAQs on scheme coverage and a separate Q&A on Scheme Changes as a result of the 2015 Triennial Review.

General Cyclone Pool FAQs


What is the purpose of the cyclone pool?

The cyclone pool is designed to lower insurance premiums home, strata and small business policyholders with high cyclone and related flood damage risk by reducing the cost of reinsurance, which is a significant cost component of premiums for these policies.

What is the role of ARPC?

ARPC is responsible for administering both the Cyclone and Terrorism Reinsurance Pools.

Do consumer policyholders have to join the cyclone pool?

No. The cyclone pool is a reinsurance arrangement between insurers and ARPC.

Who should join the cyclone pool?

Insurers with eligible cyclone risks.

Do all insurers have to join the cyclone pool?

Some insurers are not required to join the cyclone pool. The following insurers have the option not to participate: 

  • General insurers with total gross written cyclone premiums of less than $10 million for a calendar year prescribed by the regulations (exempt general insurer)
  • Lloyd’s underwriters under the Insurance Act 1973 (Cth) and 
  • Unauthorised foreign insurers under the Insurance Regulations 2002 (Cth).

Is it compulsory to join the cyclone pool?

Yes. If an insurer meets the premium threshold, they must join the cyclone pool and may incur penalties if they do not.

When do insurers have to join the cyclone pool?

Insurers with Gross Written Premium over $10 million (for eligible householders, small business, and strata) must join the cyclone pool (not including regions ARPC has specified as exempt by notifiable instrument).

Insurers with Gross Written Premiums of $300 million or more (for the householders class of direct business as defined in APRA GPS001) must join the cyclone pool before 31 December 2023. 

Insurers with Gross Written Premiums of under $300 million (for the householders class of direct business as defined in APRA GPS001) have until 31 December 2024 to join the cyclone pool.

How do insurance companies join the cyclone pool?

To join the cyclone pool, insurers will have to sign a Reinsurance Agreement with ARPC.

Will contents damage outside the property boundary be covered by the cyclone pool?

Item 5B(4)(b) of the Insurance Regulations 2002 (Cth) provides cover under home insurance for items that are usually located in the building or at the site but are still insured under the insurance contract when not located at the site.

Can insurers choose which risks to cede to the Reinsurance Agreement?

No. An insurer is obliged under the Reinsurance Agreement to cede all “eligible” policies from their entire book of business for remittance and reporting to ARPC and will not have the option to self-select which policies are covered and which are not.

What classes of business are covered by the cyclone pool?

All Domestic property wholly or mainly residential (Home and Contents and Landlords): No sum insured limit.

Small Medium Enterprise: Max AUD $5 million sum insured limit.

Residential Strata (50% or greater where occupancy is split with commercial) - No sum-insured Limit.

Commercial Strata– Max AUD $5 million sum insured.

How should insurers treat a risk that has a mid-term endorsement which means the eligibility of the risk changes? (e.g. a SME risk changing from $4m sum insured to $6m)

If the risk is no longer eligible at mid-term endorsement, the cyclone pool will not cover the risk for the remaining policy term. The insurer should provide the transaction as a pro-rata refund of the ARPC reinsurance premium in the movement report. If the risk becomes eligible mid-term, the cyclone pool will cover the risk from the endorsement date and the insurer should include the risk in the movement file, paying ARPC the reinsurance premium for the remaining policy term.

Do insurers have to transfer all business covered on the same day?

Insurers will have the option to transition into the cyclone pool using a staggered approach through separate brands and by class of business. ARPC will work with insurers to assist smooth transitioning.

Can insurers set their own reinsurance premium rates?

No. ARPC will provide rates to insurers which will have to pay this premium to ARPC. Insurers will continue to set their own premium rates for their consumer policyholders.

Can an insurer enter into other reinsurance agreements?

Yes. However, ARPC’s Cyclone Reinsurance Agreement will respond before any other reinsurance contract. All eligible cyclone risks are covered under the cyclone pool. Insurers are not precluded from obtaining additional reinsurance from the private market for any retained risks. This ensures all risks held by insurers can have appropriate reinsurance arrangements.

Do insurers have to disclose cyclone premium rates?

No. Insurers are not required to publish the cyclone reinsurance premium or display the premium on insurance policy documentation. However, the Australian Competition and Consumer Commission (ACCC) will have an ongoing price monitoring role focused on what insurers are charging consumer policyholders.

How do insurers know if they have calculated ARPC rates correctly?

ARPC will validate the premium submission when insurers submit premium returns. ARPC will also conduct insurer customer audits.

How do insurers apply original policy excess where ARPC only covers certain damage to certain property?

ARPC expects insurers to pro-rata the original policy excess in the same proportion as the claims expense and therefore only recover from the pool the claim amount, minus the apportioned excess.

How should insurers apportion claims/works/invoices for claims where ARPC are only liable to pay a part of the loss? (e.g. where there are commercial and residential losses on one policy, and ARPC only covers the residential part of the loss)

Where possible, invoices should be allocated to commercial work and residential work. Where this is not possible, ARPC expect insures to assess this in an equitable way between themselves and the cyclone pool.

How should insurers deal with Aggregate deductibles across insurance policies?

In the event that SME policies are insured as part of a schedule of many locations and have an aggregate deductible for the purpose of calculating claims then ARPC expect the insurance company to take reasonable steps to allocate the deductible.

Declared Cyclone Event FAQs


How will I know whether the recent event is a Declared Cyclone Event?

ARPC will notify all insurer customers by email once the Bureau has notified ARPC that the event is a Cyclone. The ARPC website will also be updated with the details of the Declared Cyclone Event with details of the start, end and claim period for the cyclone event. This information will also be available in PACE.

When will cyclone communications be available from ARPC?

ARPC is required to declare a cyclone on its website within 24 hours of being officially notified by the Bureau that a cyclone exists. Following the declaration on the website it might take up to 48 hours for ARPC to send out an official email notification. The notification will be sent to all insurer customers and include further details of; the start/re-intensification/end of the cyclone. Details about current and recent cyclones can also be found on the ARPC website.

When will the federal register be updated?

Updates in the federal register may take up to 3 business days.


Australia’s weather agency, the Bureau of Meteorology (BoM), will observe when a cyclone begins and ends. ARPC must declare a cyclone event within 24 hours of receiving the BoM’s advice. 


Insurer customer logins to ARPC

Terrorism Insurer Portal (RISe)

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.

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.