Strata Mitigation Discounts for Cyclone Pool Announced
The Cyclone Reinsurance Pool will introduce strata mitigation discounts as part of its revised premium pricing model, effective 1 April 2025.
The Cyclone Reinsurance Pool will introduce strata mitigation discounts as part of its revised premium pricing model, effective 1 April 2025.
These changes were announced by the Australian Reinsurance Corporation (ARPC) following the 2024 Pricing Review of the Cyclone Reinsurance Pool Premium rates, which included industry consultation that closed on 26 July 2024.
The scope of the review comprised ensuring premium rates were still meeting the Cyclone Pool’s legislative objectives, introducing premium discounts for strata properties that have undertaken risk mitigation, maintaining the pricing algorithm to rate new addresses registered since the previous review, and addressing insurer feedback to ensure the pricing algorithm was more consistent with market practice.
Strata mitigation discounts
Strata premium discounts, which are expected to incentivise mitigation, have been introduced for the following:
Roof mitigation activities (including a full roof structure retrofit, the addition of fastened flashings on metal roofs and sarking under the tiles for tile roofs)
Installation of permanent protection (for example, shutters or screens) on all windows
Retrofit of vehicle access doors on low-rise Strata properties (built before 1982)
Installation of gutter overflows
External door mitigation activity, including solid cores on all timber doors and external protection on balcony doors
In the Pricing Review report, ARPC concluded that the legislative objectives of the Cyclone Pool continue to be met, and current premium rates are adequate while providing the most benefit to medium and high-risk properties, and the changes to the premium algorithm to strata buildings will further enhance meeting the cyclone pool’s purpose.
For further details, go to the ARPC website.