Staff Reporter
,
Australia
/StudioOMG from Envato
Insurance availability increased by 6% for average houses.
The Cyclone Reinsurance Pool (cyclone pool) led to a 10% average decrease in home insurance premiums, with reductions of up to 27% for properties at the highest risk in northern Australia, a study from the Massachusetts Institute of Technology (MIT) has revealed.
The study also showed insurance availability increased by 6% for average houses in northern Queensland, and by 11% for the highest-risk properties.
The paper, “Insuring Correlated Climate Risk: Evidence from Public Reinsurance,” by Adam Solomon, a PhD candidate at MIT, analysed how reinsurance for cyclone risk in Australia’s home insurance market mitigates the impact of extreme weather.
Whilst some smaller insurers have yet to join the cyclone pool, Solomon noted this is unlikely to affect premium costs significantly, as the pool already includes the largest insurers, covering 95% of policies.
The Australian Reinsurance Pool Corporation is currently reviewing the cyclone pool premium rates set in 2022, with minor changes expected from 1 April 2025.
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Alice J. Roden started working for Trending Insurance News at the end of 2021. Alice grew up in Salt Lake City, UT. A writer with a vast insurance industry background Alice has help with several of the biggest insurance companies. Before joining Trending Insurance News, Alice briefly worked as a freelance journalist for several radio stations. She covers home, renters and other property insurance stories.