Australian Reinsurance Pool reviews cyclone pool rates for 2025

The 2024 premium rate review aims to ensure that rates align with the objectives.

The Australian Reinsurance Pool Corporation (ARPC) is reviewing the 2022 Cyclone Reinsurance Pool premium rates and considering minor changes effective from 1 April, 2025. 

Feedback is invited on the current and proposed rates, with submissions due by 26 July 2024.

A key proposed change is the introduction of mitigation discounts on wind premium rates for eligible Strata policies. 

This aims to incentivise risk reduction through lower reinsurance premiums.

The 2024 premium rate review aims to ensure that rates align with the objectives of the Terrorism and Cyclone Insurance Act 2003 (TCI Act). 

These objectives include ensuring premiums cover claims and expenses over the long term, keeping premiums low in high-risk areas while encouraging risk mitigation, and maintaining competitive rates in lower-risk areas.

The ongoing analysis indicates that the 2022 rates continue to meet these objectives, so the proposed changes are minor. The proposed Strata mitigation discounts are based on research by James Cook University's Cyclone Testing Station and reflect estimated risk reductions from mitigation activities. These discounts will be reviewed as more claims data becomes available.