Cyclone Reinsurance Pool: What It Means for Your Business

How the pool works.

It’s reinsurance: insurance for insurers. You don’t buy it or claim on it; your insurer does.

Who runs it The Australian Reinsurance Pool Corporation (ARPC), with a $10 billion government guarantee each financial year^{1, 2}. It covers losses from 1 July 2022¹, and every insurer required to join had joined by 31 December 2024³. Insurers with less than $10 million of eligible premium income don’t have to join⁴.
Where All of Australia, but its support is aimed at cyclone-prone areas, mainly in northern Australia².
Which business policies Cover for a building, its contents or both, with total sums insured of $5 million or less, plus business interruption from damage to, or loss of use of, that property^{1, 4}. ARPC counts the whole policy toward the $5 million: building, contents and business interruption, at every location⁵. Farm businesses aren’t included¹.
Homes and strata Home and contents policies, and strata buildings where at least half the floor space of the units is mainly residential¹.
What damage Wind, rain and rainwater runoff, storm surge and flood caused by a cyclone, starting while the cyclone is active or within 48 hours after it ends^{1, 2, 4}. For Cyclone Alfred, that period ran from 28 February to 10 March 2025⁶.

Policyholders aren’t required to join the pool², and ARPC says it doesn’t affect your claim with your insurer⁷. Insurers still set their own premiums⁵.

What it doesn’t change.

The pool reinsures the cover you already have. It doesn’t add to it.

Your cover The pool covers storm surge and flooding only “where these hazards are covered under the policyholder’s choice of insurance cover”⁸. If your policy excludes something, ARPC says “the Cyclone Pool will not respond”³.
Flood and storm surge They can be separate. One business pack excludes flood unless it’s shown as insured on your schedule, and excludes water from the sea and storm surge either way⁹. One strata wording makes flood and storm surge optional¹⁰.
Named cyclones Some policies still exclude them. AFCA looked at a business pack that excluded damage from any tropical cyclone named by the Bureau of Meteorology¹¹.
Your claim Your insurer still handles it⁷. The 48-hour period decides what your insurer can recover from the pool, not what your policy pays.

For what a property policy generally covers, see commercial property insurance, or strata insurance for units.

What’s happened to premiums.

Average premiums in higher-risk areas have fallen since insurers joined, but not for every cover.

Policy	Average premium, higher cyclone risk areas
Small business property	Down 24% per $100,000 insured in the first year after insurers joined, and 31% after up to two years (ACCC)^{12, 13}
Home	Down 11% in the first year (ACCC)^{12, 13}
Strata	Down 8% in the first year (ACCC)^{12, 13}
Business interruption	Higher in January 2026 than before the pool in each higher-risk band ARPC measured: up 9% in the highest, and 35% and 39% in the others (ARPC quote data)¹⁴

Not just the pool Stakeholders told the ACCC some small businesses were raising their excess or cutting their cover, which “may mean that businesses are underinsuring”. The ACCC says the fall in premiums may not be due to the pool alone¹⁵.
Discounts for protection Since 1 April 2026, ARPC discounts the pool premium for a small business’s building and contents cover when the building it operates from is more cyclone-resistant: up to 10% for a full roof retrofit, and up to 3% each for window protection, cyclone-resilient doors, vehicle-access doors and gutter overflows³. ARPC says the insurer decides how any discount is passed on⁷.

See why business insurance goes up for what else moves premiums.

Insurance embargoes.

When a cyclone is close, insurers can stop selling cover in its path.

What they are A pause on “issuing new insurance policies or changes to existing policies when a disaster is imminent”, to stop people buying cover just before it hits¹⁶.
Where and how long Event-based embargoes cover the predicted path, such as the postcodes in the way of a developing cyclone¹⁵. One government home insurer says some last about 24 hours and others about a week¹⁷.
Renewals The Insurance Council says embargoes aren’t applied when a customer is renewing¹⁶.
Waiting periods Some insurers sell a policy with a waiting period instead¹⁶. One business pack doesn’t cover damage from a named cyclone or bushfire in the first 72 hours of a new policy⁹.
Cyclone Alfred In March 2025, insurers placed embargoes on customers in south-east Queensland and northern NSW¹⁶.

The ACCC found the pool had some impact on standing cyclone embargoes in northern Australia, and little on other embargoes^{13, 15}. The same government home insurer suggests buying insurance well before a disaster season¹⁷.

Cyclone season.

When cyclones come, where they hit hardest, and what recent ones cost.

When The season runs from 1 November to 30 April¹⁸.
How many On average, there are 10 tropical cyclones in the Australian region each season, and 3 to 4 make landfall. Since 2000, the average has been closer to 8 or 9¹⁹.
Where The most cyclone-prone area is the north-west coast between Broome and Exmouth¹⁸.
Recent claims Cyclone Alfred brought about 132,000 claims and more than $1.5 billion in insured losses in 2025²⁰. Cyclone Jasper in 2023 cost $409 million from around 10,500 claims¹⁶.

Businesses in northern Australia, and landlords of shops and offices, can find more in our retail and commercial landlord guides.

Real cases.

Decisions from the Australian Financial Complaints Authority (AFCA) about cyclone claims. Every claim depends on the policy wording.

Waves, December 2023 cycloneA sports club on a sea inlet had most of its December 2023 claim paid. Damage to its pontoons and piles from waves was excluded as “action of the sea”, and AFCA agreed. August 2025²¹.
Storm or flood, Cyclone AlfredA coastal Queensland shop took on 0.28 metres of water. Its policy covered storm but not flood, and a nearby watercourse had overtopped. AFCA said that “once floodwater mixes with stormwater, it is all regarded as floodwater”. March 2026²².
Underinsured, 2021 cycloneA business’s buildings were insured for $1,462,500. The 80% co-insurance clause reduced the claim, and AFCA rejected the argument that the building and contents sums insured should be added together. May 2026²³.
Closed, not damagedA hair salon closed for three days during ex-Cyclone Alfred without damage. AFCA agreed its policy didn’t cover lost income from closing “due to inclement weather or even safety concerns”. July 2026²⁴. A restaurant lost its claim for the two days it closed before any damage, as no authority had closed it or ordered an evacuation²⁵.

FAQ

Common questions.

What is the cyclone reinsurance pool?

A government-backed reinsurance scheme for eligible home, strata and small business policies, run by the Australian Reinsurance Pool Corporation (ARPC). It started in July 2022, every insurer required to join was in by 31 December 2024, and it has a $10 billion government guarantee each financial year.

Is my business insurance covered by the cyclone pool?

Generally yes, if it covers a building, contents or both with total sums insured of $5 million or less. ARPC counts business interruption and every location on the policy. Your insurer must also be in the pool, and some small insurers don’t have to join. Farm businesses aren’t included. Policyholders don’t join the pool; insurers do.

Does the cyclone pool cover flood and storm surge?

Only if your policy does. The pool reinsures what your policy already covers, and your policy’s exclusions still apply.

Has the cyclone pool reduced premiums?

The ACCC found average small business premiums in higher cyclone risk areas fell 24% per $100,000 insured in the first year after insurers joined. In ARPC’s quote data, business interruption premiums were higher in January 2026 than before the pool.

What is an insurance embargo?

A pause on new policies, and changes to existing ones, in an area where a disaster such as a cyclone is imminent. It stops people buying cover just before a disaster. Renewals generally continue.

How long do insurance embargoes last?

It varies. One government home insurer says some areas are embargoed for a short period, such as 24 hours, and others for longer, such as a week.

Does business interruption cover closing for a cyclone warning?

Only if the policy covers it. AFCA upheld declines where a salon and a restaurant closed during ex-Cyclone Alfred with no damage and no order from the authorities.

Still have a question? A broker can talk it through with you.

Get a quote from a broker

Covers in this guide.

Our guides to what each cover generally does, what it costs and the rules that apply.

Commercial Property Insurance Strata Insurance Business Insurance Package

Sources.

Terrorism and Cyclone Insurance Act 2003, compilation No. 12, Federal Register of Legislation, 8 November 2025
Cyclone reinsurance pool fact sheet, ARPC, July 2025
Cyclone Pool: premium determination applying from 1 April 2026, ARPC (prepared by Finity Consulting), September 2025
Terrorism and Cyclone Insurance Regulations 2003, compilation No. 11, Federal Register of Legislation, 1 March 2024
Cyclone Pool FAQs, ARPC
Update on Tropical Cyclone Alfred, ARPC, 25 March 2025
Cyclone Pool consumers, ARPC
Explanatory memorandum, Treasury Laws Amendment (Cyclone and Flood Damage Reinsurance Pool) Bill 2022, Parliament of Australia, 2022
Business Pack policy wording, Chubb, October 2023
Strata Insurance PDS and Policy Wording, Chubb, February 2024
Determination 12-25-287730, AFCA, 25 August 2026
Cyclone reinsurance pool reduces premiums in high-risk areas but affordability pressures persist, ACCC, 25 June 2026
Insurance monitoring report (fifth and final report), ACCC, June 2026
Cyclone Reinsurance Pool Premium Assessment, ARPC, May 2026
Insurance monitoring report, ACCC, July 2025
Insurer update on disaster response preparation for TC Alfred, Insurance Council of Australia, 7 March 2025
Embargo FAQs, Defence Service Homes Insurance
Tropical cyclone knowledge centre, Bureau of Meteorology
Australian tropical cyclone season, Bureau of Meteorology, October 2025
Extreme weather cost $3.5 billion in 2025, Insurance Council of Australia, 23 January 2026
Determination 12-24-130040, AFCA, 8 August 2025
Determination 12-25-279303, AFCA, 11 March 2026
Determination 12-24-146237, AFCA, 13 May 2026
Determination 12-25-313222, AFCA, 17 July 2026
Determination 12-25-285473, AFCA, 9 April 2026

What does the cyclone reinsurance pool mean for your business?