By 30 June 2024, 18 insurers had joined the cyclone pool managed by Australian Reinsurance Pool Corporation (ARPC), according to a report released last week by the public financial corporation.
In its Annual Report for the fiscal year that ended on 30 June 2024 (FY2024), ARPC says that the 18 insurers covered between them 98% of eligible home insurance policies, close to 100% of eligible strata insurance policies, and 87% of eligible small-to-medium enterprise (SME) insurance policies.
Dr Christopher Wallace, the chief executive of ARPC, said, “The cyclone pool has successfully met the legislative requirement to have all the large general insurers writing business in northern Australia under the cyclone pool by the end of 2023 (as required by legislation). We are well and truly on track to achieve our next target, which is for remaining insurers writing business in northern Australia to have joined by 31 December 2024.”
ARPC commenced operations of the cyclone pool on 1 July 2022. The pool is a reinsurance pool for insurance companies to transfer their risk for cyclones and cyclone-related flood damage. It is backed by an A$10bn ($6.6bn) government guarantee.
ARPC received A$717m in gross written premiums from insurers for cyclone reinsurance in FY2024 (FY2023: A$160m GWP). From inception, the pool incurred A$155.05m in claims with A$16.5m in claims paid to insurers for the current and previous season’s tropical cyclones.
The 2023-24 Australian cyclone season commenced on 1 November 2023 and concluded on 30 April 2024. Five tropical cyclones were declared as an event for the cyclone pool (Jasper, Anggrek, Kirrily, Lincoln, and Megan). The declared events resulted in small to moderate claims costs.
ARPC also operates a terrorism reinsurance pool that provides insurance cover for eligible terrorism losses. The Terrorism Reinsurance Pool commenced operations on 1 July 2003.
Financial snapshot of the terrorism and cyclone pools
|
FY2024
|
Cyclone Pool A$
|
Terrorism Pool A$
|
|
Gross written premiums
|
717m
|
407m
|
|
Total funding available for claims
|
10.5bn
|
14.7bn
|
|
Retained net assets
|
479m
|
1,184m
|
|
Cash and investments
|
697m
|
1,255m
|
|
Source: ARPC Annual Report 2024
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