Allianz joins the Cyclone Reinsurance Pool

The Cyclone Reinsurance Pool (cyclone pool) is a reinsurance arrangement between the Australian Government and insurers that enables insurance companies to transfer their risk for cyclones and cyclone-related flood damage including wind, rain, rainwater run-off, storm surge & riverine flood. The cyclone pool is backed by a $10 billion Government guarantee and is administered by the Australian Reinsurance Pool Corporation (ARPC).

The cyclone pool operates Australia wide, but targets support to cyclone-prone areas with the purpose of improving insurance affordability for consumers in Northern Australia.

How will this benefit customers?

Insurance premiums for properties exposed to cyclone risk can be expensive and for some customers, unaffordable. Allianz has long supported the introduction of a reinsurance pool to assist customers to obtain insurance to protect their property.

The objective of the pool is to enable insurers to purchase reinsurance cover for cyclone risk at a lower rate from the ARPC (which operates on a non-profit basis) than would otherwise be possible through the commercial reinsurance market, the cost savings of which is intended to reduce premiums paid by customers most exposed to cyclone risk.

We predict that average premiums for existing customers exposed to cyclone and cyclone related flooding risk will be on average 6% lower. Customers who are more exposed to cyclone risk will see a reduction of on average 30% in premiums, in some locations.

Areas with cyclone risk are across parts of WA, Northern NT, QLD and Northern NSW.

What is changing?

There is no change to any products or claims processes. The only change is to the reinsurance arrangements for cyclone risk.

Which policies will be transitioned into the Pool?

We recognise that many customers will benefit from the pool, so we are working as quickly as possible to transition our householder portfolio by 1 January 2023. This includes Allianz’s home building, home contents and landlord policies.

When will the premium changes come into place?

Premium changes for our householder portfolio will come into place for any relevant policies that are entered into or renewed, with an effective date of 1 January 2023 onwards.

Allianz welcomes the additional investment the Government is making to enhance the resilience of communities to natural catastrophes, and we look forward to continuing to play our part.

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Disclaimer

This communication has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708 ("Allianz"). Information contained in this communication is accurate as at 16 March 2023 and may be subject to change. In some cases information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way. Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this communication.

Insurance is underwritten by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708.

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