ARPC chair Julie Anne Schafer
opened Australian Reinsurance Pool Corporation’s (ARPC) second Cyclone Risk Insurance Seminar by affirming ARPC’s core purpose: through reinsurance, improving the accessibility and affordability of insurance for Australians facing risks from terrorism and cyclones. Ms Schafer, a Brisbane-based director with extensive experience in regulated sectors such as insurance, energy, and transport, emphasised that the pathway to long-term mitigation begins with stabilising the insurance market.
The cyclone pool, a central feature of ARPC’s mission, has seen the successful onboarding of all mandated insurers. This initiative, aimed at reducing insurance premiums for communities most at risk of cyclones, is already making measurable impacts. She noted a 39% reduction in average home insurance premiums for properties in the highest-risk areas, demonstrating that targeted reinsurance can lead to meaningful affordability gains. In tandem, availability of coverage has improved, with higher quote success rates observed in medium- and high-risk cyclone zones.
She also acknowledged the intensity of the recent cyclone season, marked by five declared events since November, including Ex-Tropical Cyclone Alfred. These events reinforced the importance of swift claims processing and recovery coordination, areas where ARPC continues to partner closely with insurers and industry stakeholders.
Ground-level resilience
CEO and founder of the Resilient Building Council (RBC) Kate Cotter brought a practical, ground-up perspective to the seminar. RBC’s work focuses on helping communities adapt their homes and infrastructure to withstand multi-hazard risks, including storms, bushfires, and floods. The RBC’s flagship Multi-Hazard Resilience Rating system also assesses building vulnerability and provides property owners with actionable upgrade recommendations.
Ms Cotter emphasised the growing demand from households seeking guidance on how to reduce risk and access affordable insurance. “People know more about the energy efficiency of their washing machine than the resilience of their home,” she said, pointing to a critical information gap. RBC’s tools are designed to translate complex technical data into digestible, property-specific action plans.
A highlight of her presentation was the introduction of self-assessment apps, which allows for homeowners to evaluate bushfire resilience and soon, other hazards like storms and floods. Already, over 40,000 assessments have been completed, reflecting both public interest and the need for scalable solutions. For those unable to complete on-site evaluations, a remote certification process has also been piloted, ensuring broader accessibility.
She discussed how resilience improvements can create value beyond risk reduction. For instance, mortgage lenders such as NAB are piloting loan discounts for homes with high resilience ratings. Similarly, insurers are beginning to offer premium discounts – up to 20% in some cases – for properties that meet certain resilience criteria. These market incentives, combined with practical tools and community partnerships, help drive capital towards more robust buildings and neighborhoods.
Learning from Cyclone Alfred
Natural Hazards Research Australia (NHRA) Science and Innovation director, Dr Cheryl Desha provided an account of the impact of Ex-Tropical Cyclone Alfred. Although not the most powerful storm on record, Alfred revealed the latent vulnerabilities in Australia’s housing stock and urban planning.
Dr Desha likened Alfred to a “grey rhino” – a highly probable, high-impact event that is often ignored until it’s too late. While maximum wind speeds during the event peaked at around 100 km/h, they were perilously close to the 120-140 km/h range that could have caused widespread roof loss and structural failure across tens of thousands of homes.
Drawing on field data collected in partnership with James Cook University’s Cyclone Testing Station, she highlighted issues such as water ingress, corrosion, and poor roof anchoring. Alarmingly, even newer buildings showed signs of vulnerability due to flawed construction practices or insufficient maintenance.
Dr Desha noted that a mere 20-30 km/h increase in wind speed could have resulted in damage to over 100,000 homes. She stressed the need to retrofit existing buildings, update national construction codes, and expand the use of cyclone-resilient materials and designs. “We don’t even have the kits in southeast Queensland to retrofit what we need for the next cyclone season,” she said, calling for urgent infrastructure investment.
Financial realities and risk modelling
ARPC’s Head of Actuarial Pulkit Jain provided an overview of the cyclone pool’s risk modelling and the changing nature of cyclone risk.
Mr Jain said that Cyclone Alfred was not an outlier in ARPC’s modelling used to inform the setting of the cyclone pool premium rates. In fact, similar events are accounted for within ARPC’s stochastic simulations, which anticipate events of this magnitude approximately once every 10 years. More extreme outcomes – including potential $10bn+ losses – are also contemplated in the pool’s risk distribution.
An important takeaway was that cyclone pool premium rates are designed to be sufficient for the long-term, based on central estimates, without including profit margins or capital loadings.
Nonetheless, ARPC is closely analysing data on structural vulnerability, insurance uptake, and climate science. Cyclone Alfred revealed that around 30% of affected properties were either uninsured or underinsured, and property-level mitigation efforts remain low in the impacted region. The event reinforced the need for improved data sharing and community engagement.
ARPC has already begun publishing exposure profiles and insurance take-up data to inform public and private sector stakeholders. These initiatives, combined with collaboration with agencies like NEMA and the Australian Climate Service, are helping shape a more transparent and informed resilience ecosystem.
Scientific uncertainty and climate trends
Mr Jain also commented on the nature of shifting cyclone tracks and slower-moving systems. Drawing on consultations with the Australian Climate Service and Australia’s Bureau of Meteorology (BOM), he said that while sea surface temperatures off Brisbane have risen – potentially enabling cyclones to sustain strength further south – there isn’t conclusive evidence in the event data that cyclone tracks are trending southward. There is also no confirmed trend that cyclones are slowing down, although increasing rainfall intensity and rising sea levels remain important risk indicators.
He emphasised the distinction between pricing for current, observable risks versus preparing for long-term future scenarios.
Infrastructure, insurance, and innovation
The seminar illuminated the critical interdependencies between the built environment, financial systems, and policy frameworks. The speakers each highlighted the importance of resilience and how it must be embedded across the building lifecycle – from land use planning and construction to renovation and disaster recovery.
Integrating resilience assessments into development applications and mortgage underwriting can help guide capital towards safer, more sustainable developments. Similarly, recovery grants post-disaster presents an opportunity not just to rebuild, but to rebuild better, embedding resilience into repairs and retrofits.
On the insurance side, data sharing and collaboration are paramount. Ms Cotter described the growing willingness among insurers to incorporate RBC ratings into underwriting and pricing models. Mr Jain further reinforced this by highlighting ARPC’s growing repository of exposure and claims data.
Moreover, resilience investments offer economic opportunities beyond risk mitigation. The seminar highlighted the potential for Australia to lead globally in resilient construction, developing new technologies, materials, and design practices that can be exported to other climate-affected regions.
A national commitment to resilience
One recurring theme throughout the seminar was the need for coordinated national action. Whether it was standardising resilience disclosure at the point of property sale, investing in flood mapping and hazard data, or fostering community-led adaptation, Australia needs a unified strategy.
Ms Desha proposed a suite of policy innovations, from national hazard risk maps to community co-design of nature-based coastal defences. She emphasised the role of First Nations knowledge in guiding land and hazard management, calling for deeper engagement with indigenous communities.
Mr Jain emphasised the ongoing nature of ARPC’s premium adequacy assessments. Future changes, if needed, will be implemented through an annual review cycle intended to assess the effectiveness of the rates to meet cyclone pool objectives. He also noted that increasing transparency around the cyclone pool’s performance, such as through the Financial Outlook Report and Premium Determination Reports, is vital to maintaining industry engagement.
At a macro level, initiatives like ARPC’s Cyclone Pool demonstrate that structural solutions – grounded in science and delivered through partnerships – can have tangible benefits. But as climate risks grow more acute, incremental change may no longer suffice.
Building a safer future
ARPC’s Cyclone Risk Insurance Seminar brought together leaders from across sectors and showcased what is possible when science, policy, and community converge with a common purpose.
When the industry converges together with insurance-backed incentives, actuarial insight, and strategic government support, Australia is better equipped than ever to confront the challenges ahead. Yet, as all the speakers noted, this is only the beginning. The work of building a safer, more resilient Australia will require continued collaboration, sustained investment, and above all, a shared commitment to protecting the people and places most at risk.
Cyclones are inevitable. Catastrophe is not. The choices made today will determine the strength of our communities tomorrow. A