Insurance monitoring

  • The government has created a cyclone and related flood damage reinsurance pool.
  • The pool is designed to lower insurance premiums for households and certain small businesses with high cyclone and related flood damage risk.

What the ACCC does

  • We monitor certain insurance products to evaluate the impact of the government’s reinsurance pool for cyclone and related flood damage.
  • We collect data to monitor the prices, costs and profits of this type of insurance cover and provide at least one report each calendar year.

What the ACCC can't do

  • We don’t regulate insurance prices.
  • We don’t operate the cyclone reinsurance pool.

About the cyclone and related flood damage reinsurance pool

The government has created a reinsurance pool for cyclones and related flood damage. This is a financing mechanism that provides insurance for insurers. The pool allows insurers to transfer some of their risk to the government.

It covers household, strata, and small business property insurance policies. The pool operates Australia wide but its focus is on cyclone-prone areas, which are mainly in northern Australia.

The goal is to reduce the price of reinsurance, which is a significant cost component of premiums for these policies.

The Australian Reinsurance Pool Corporation administers the cyclone reinsurance pool. 

Read more about the design and operation of the Cyclone reinsurance pool on the Australian Reinsurance Pool Corporation website.

Since 1 July 2022, insurance companies have been able to voluntarily include eligible policies in the cyclone reinsurance pool. This becomes mandatory from the end of 2023 for large insurers and the end of 2024 for small insurers.

This means insurers can have access to the pool to purchase reinsurance for certain types of risks related to cyclones and related flood damage.

What we do in insurance monitoring

The ACCC collects data and monitors insurance premiums to evaluate the impact of the cyclone reinsurance pool and assess whether savings are passed through to policy holders.

We report to the government and public about:

  • insurance premiums paid on household, residential strata, and small business policies
  • the impacts of the cyclone reinsurance pool on those premiums.

We monitor prices, costs and profits of insurance cover that relates to the destruction of, or damage to:

  • residential homes and contents
  • strata title residences
  • certain small business premises and contents.

We monitor these factors before and after the introduction of the cyclone reinsurance pool.

We provide at least one report each calendar year, starting with a first report in late 2022.

Background to our role in insurance monitoring

In 2017, the Australian Government directed the ACCC to conduct a wide-ranging inquiry into the supply of residential building (home), contents and strata insurance in northern Australia.

We published the Northern Australian Insurance Inquiry final report in 2020, which detailed our market analysis for home, contents and strata insurance in northern Australia.

The legal basis of our work

Our functions in relation to price inquiries, price notifications and price monitoring are set out in part VIIA of the Competition and Consumer Act 2010.

See also

Northern Australian Insurance Inquiry final report

The cyclone pool – Australian Reinsurance Pool Corporation