ARPC Declares Tropical Cyclone Dianne an Official Cyclone Event

ARPC has declared ex-Tropical Cyclone Dianne a cyclone event affecting Western Australia, allowing for claims under the federal reinsurance pool. The cyclone made landfall as a Category 1 and later weakened. The pool aims to reduce insurance premiums and is backed by a A$10 billion government guarantee, covering over 880,000 policies.

The Australian Reinsurance Pool Corporation (ARPC) has officially recognized ex-Tropical Cyclone Dianne as a cyclone event, following its impact on Western Australia over the weekend. Dianne made landfall as a Category 1 cyclone but subsequently downgraded to a tropical low, as reported by the Australian Bureau of Meteorology. The cyclone caused significant heavy rain and flooding, affecting both personal and commercial properties as well as infrastructure.

ARPC CEO Christopher Wallace announced that Dianne was designated a cyclone event at 2:18 a.m. local time on Saturday, marking the beginning of the claims period. Under the reinsurance pool regulations, coverage is activated within 24 hours once the Bureau of Meteorology indicates the existence of a cyclone likely to impact Australia.

The declaration follows tropical cyclones Isla and Gabrielle earlier in the year, indicating a continued trend of cyclone events recognized under the Terrorism and Cyclone Insurance Act 2003. The cyclone pool, initiated in July 2022, serves as a reinsurance mechanism to protect household, strata, and small business insurance policies across Australia.

The financial backing for the pool comes from a government guarantee of A$10 billion. The ARPC operates this scheme, which is designed to lower insurance premiums and foster competition in cyclone-prone areas by eliminating profit margins. It aims to ensure that over 880,000 residential and small business properties in northern Australia can benefit from the pool’s coverage.

ARPC’s declaration of Tropical Cyclone Dianne as a cyclone event enables insurance coverage for affected properties under a newly established reinsurance pool. This initiative not only supports those impacted and aims to stabilize insurance premiums but also enhances competition in cyclone-affected areas of Australia.

Original Source: www.tradingview.com