New Insurers Join the Cyclone Reinsurance Pool, Providing Widespread Coverage

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The Australian Reinsurance Pool Corporation (ARPC), responsible for administering the pool, has recently released the first Financial Outlook Report, which is mandatory under the scheme. Feedback from communities and individuals has indicated that the benefits of affordability and availability of insurance are starting to show. More insurers have joined the pool since the release of the report, and the impacts will become clearer in future updates, says ARPC CEO Chris Wallace.

Growing Benefits for Insured Individuals and Communities

"We have already witnessed positive results," says Dr. Wallace in an interview with insuranceNEWS.com.au. "However, it will take some time for the data to reflect the overall benefits of the entire pool."

The report states that as of July 1, nine insurers had already joined the Cyclone Reinsurance Pool, with IAG and Auto & General later becoming participants. The ARPC reveals that premium discounts for household mitigation efforts amounted to $4.9 million by June 30. The scheme aims to expand incentives for mitigation and encourages insurers to collect relevant information.

"Over the next 12 months, we will develop specific strategies for Small and Medium Enterprises (SME) and strata properties," explains Dr. Wallace. "We are collaborating with James Cook University in Townsville to assist us in developing rating factors for the premium formula. This process will take some time, and we will inform insurers in advance."

Positive Outlook for the Pool Despite Past Losses

According to the report, thanks to a relatively calm cyclone season, the pool ended its first year of operation with a net asset position of $43 million. The projected figures for the current fiscal year include earned premium of $737.7 million, an underwriting loss of $4.2 million, and investment income of $1.7 million, resulting in an operating loss of $2.5 million.

During the initial startup phase, the cyclone pool is expected to experience small underwriting losses for the next two years due to a higher expense ratio. However, from fiscal 2025 onwards, investment income is projected to generate a small operating profit.

It's important to note that deviations from the projections are likely due to the volatility of cyclone activity. Currently, the ARPC is closely monitoring Cyclone Jasper after declaring it as the first event of the season.

Stable Premiums and Positive Impact on the Reinsurance Market

Dr. Wallace states that the ARPC is monitoring various financial influences such as inflation. Overall, the report indicates that the cyclone pool is operating as expected during its early stages. "The premiums we have set seem to be performing as anticipated. Unless our modeling undergoes significant changes, we do not expect any material adjustments in the near future," he confirms.

Dr. Wallace also mentions that reports following the mid-year commercial reinsurance renewals indicate that insurers have been purchasing less capacity, with the pool being a contributing factor. This trend is likely a response to the period that included record flooding in eastern Australia. "We have observed evidence that the pool has facilitated the reinsurance market by enabling the deployment of available capacity towards other risks," adds Dr. Wallace.

Large insurers were required to join the cyclone reinsurance pool by the end of this year, while smaller insurers were given an additional 12 months to comply.

Published:Thursday, 14th Dec 2023
Author: Paige Estritori

Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.

Share this news item:

Insurance News

Clear

Grain Price Rally Puts Seasonal Risk Back in Focus

24 Jul 2026: Paige Estritori

Grain Central reported on 23 July 2026 that Australian grain prices have continued to firm, supported by global wheat market heat and local uncertainty about new-crop production. For growers, the story is not simply about better prices. It is also a reminder that a promising crop can still carry significant risk when weather, timing and market volatility start moving together. - read more

Second NSW H5 Bird Flu Detection Puts Biosecurity Back on the Farm Risk Agenda

17 Jul 2026: Paige Estritori

A second H5 bird flu detection in New South Wales has moved avian disease risk from a distant global concern to a practical on-farm planning issue for Australian producers. The latest case involved a petrel found at Hawks Nest on the NSW Mid North Coast, following an earlier detection at the same beach. Authorities have indicated the human health risk remains low, and there has been no reported H5 detection in NSW commercial poultry flocks at this stage. - read more

What SowSure Could Mean for Crop Risk Planning

10 Jul 2026: Paige Estritori

On 3 July 2026, Grain Central reported that RAGT Australia’s SowSure crop establishment protection initiative had received $982,049 through the Australian Government’s Future Drought Fund. For grain growers, the news is notable because it places insurance-style thinking closer to the sowing decision, rather than waiting until later-season losses become obvious. - read more

What a Major Quad Bike Fine Means for Farm Risk

03 Jul 2026: Paige Estritori

A recent quad bike fatality case in New South Wales has put farm safety, workplace liability and risk management back under close attention. ABC Rural reported on 2 July 2026 that Wumbulgal Agriculture Pty Ltd was fined $555,000 after an 82-year-old worker died in a quad bike accident at Yenda in the Riverina in February 2023. The company was found to have breached work health and safety obligations. - read more

New Herbicide Restrictions Raise On-Farm Risk Questions

26 Jun 2026: Paige Estritori

Australian farmers now have clearer, but tighter, rules for two widely used knockdown herbicides after the Australian Pesticides and Veterinary Medicines Authority finalised its review of paraquat and diquat on 23 June 2026. The chemicals have not been removed from the market, but their continued use will sit behind significant new conditions affecting application rates, equipment, handling systems and worker protection. - read more

Mackay Sugar Cyber Incident Highlights a New Risk for Farm Businesses

19 Jun 2026: Paige Estritori

A reported ransomware incident affecting Mackay Sugar has put agricultural cyber risk back in the spotlight, this time with a clear lesson for producers who depend on processors, contractors and shared infrastructure. ABC Rural reported on 18 June 2026 that a Russian-speaking ransomware operation known as The Gentlemen had claimed responsibility for a cyber attack that disrupted two Mackay Sugar mills, with the company working to verify the claim and restart Farleigh and Racecourse mills in stages. - read more

NRMA's Departure from Farm Insurance: What It Means for Australian Farmers

12 Jun 2026: Paige Estritori

In a significant shift within the Australian insurance landscape, NRMA has announced its withdrawal from the farm insurance market, ceasing the sale of new policies as of July 1, 2025. This decision affects both hobby and commercial farm insurance policies, leaving many farmers in search of alternative coverage options. - read more

Achmea and Protected Cropping Australia Join Forces to Support Greenhouse Farmers

12 Jun 2026: Paige Estritori

Achmea Farm Insurance and Protected Cropping Australia (PCA) have announced a strategic partnership aimed at bolstering risk mitigation and resilience within Australia's protected cropping sector. This collaboration seeks to empower greenhouse and glasshouse growers by providing tailored insurance solutions and fostering knowledge exchange on best practices. - read more

Allstate Underwriting and Mitsui Sumitomo Insurance Collaborate to Strengthen Farm Insurance in Australia

12 Jun 2026: Paige Estritori

Allstate Underwriting Agencies Pty Ltd and Mitsui Sumitomo Insurance Co., Ltd have announced a multi-year capacity agreement, marking the beginning of a strategic partnership aimed at bolstering farm insurance offerings in Australia. This collaboration focuses on providing additional capacity to the medium, small, and hobby farm sector, addressing the unique needs of these operations. - read more

Comprehensive Coverage: Harland Green's New All-Risk Insurance for Large Farms

05 Jun 2026: Paige Estritori

In a significant development for Australia's agricultural sector, Harland Green, a newly established Lloyd's coverholder, has unveiled an all-risk farm insurance package specifically designed for large commercial farming operations. This initiative aims to address the complex and evolving needs of the agricultural industry by offering comprehensive coverage that encompasses various aspects of farm operations. - read more

Click for more Insurance News