Premium Rates

ARPC has published initial premium rates and the reinsurance agreement ahead of the Cyclone Reinsurance Pool commencing operations on 1 July 2022.

ARPC is extending a further period of consultation on the initial premium rates.  

The additional consultation period closes 31 July, with the revised rates to be published in October 2022.

The pricing formula designed by ARPC is designed:

  • to be cost-neutral to Government over the longer term 
  • not to charge a profit margin, thereby increasing savings available to policyholders and insurers
  • to lower the reinsurance cost for most policies with medium-to-high exposure to cyclone risk
  • to maintain incentives for risk reduction and offer discounts for properties that undertake mitigation, and
  • to encourage policyholders to engage in strategies to mitigate cyclone and related flooding risks, while the discounts will assist in improving the affordability and sustainability of property insurance over time.

Pricing responsibility stays with insurers 

The pricing formula designed by ARPC to set reinsurance premiums uses property-level data such as:

  • geography,
  • building characteristics, and
  • mitigation.

The focus for premium reductions will be on medium-to-high-risk areas. The Australian Competition and Consumer Commission will use its price monitoring powers to collect data to assess whether the savings from the reinsurance pool are being passed through to policyholders.

Responsibility for setting insurance premiums stays with insurers, and they are responsible for commercial decisions on how they set them.

We understand costs may be affected by other factors, including changing calculations of risk, changes to labour costs, and changes in building costs.

The pool aims to pass on savings to customers, without burdening taxpayers

The pool has been designed to be cost-neutral to Government over the longer term. The premiums charged cover the long-term costs of insured risk, and ARPC’s administration costs. The pool is not designed to make a profit margin, so savings are passed on to consumers.

There is time and flexibility for insurers to join the pool

Legislation for the cyclone reinsurance pool provides insurers flexibility to transition to the pool – which will affect the timing of savings for consumers.

  • To help a smooth transition to the reinsurance pool, large insurers will have until 31 December 2023 to transition into the pool, with an additional year for small insurers.

Please see links to important documents below:


Premium Rates 

Reinsurance Agreement