Cyclone and Flood Damage
Reinsurance Pool
An update from Vero on the Cyclone Reinsurance Pool
The Cyclone Reinsurance Pool (Pool) legislation passed in Parliament on 30 March 2022 and commenced on 1 July 2022. Vero will commence Pool participation from 30 June 2023.
The Cyclone Reinsurance Pool is designed to lower insurance premiums for households and small businesses by reducing the cost of reinsurance for eligible cyclone loss.
Vero is working closely with the government and regulators to the Pool. Any reduction in costs resulting from participation in the Pool will be passed through to our customers. However, please keep in mind individual customer premiums are typically impacted by a broad range of varying factors and risks that are independent of the eligible cyclone loss component of their policy.
Vero has a proud history of supporting communities in cyclone affected areas. Thank you for your patience while we work with all stakeholders to ensure a smooth transition to the Pool.
New changes you will see for Vero SME Business Packages
New question you need to ask for Quotes and Amendments
If you are insuring your building, is any part of the building used, or intended to be used, as a place of residence (whether by the insured or another person)?
- No residential use
- Yes, less than or equal to 49% floor space residential use
- Yes, more than 49% floor space residential use
- Not applicable - no Building cover taken*
*This option will only appear for policies incepted prior to 15 August 2022 and is to be used when there is no building cover e.g. stock and contents only.
Updated risk appetite in relation to residential use buildings
How will I know if a customer is eligible for the pool? (Commercial Risks only)
Eligible = Combined Property & Business Interruption sum insured is less than $5 million.
Ineligible = Combined Property & Business Interruption sum insured is greater than $5 million.
ANZSICs we will now decline
The following ANZSICs will result in a policy being declined for new business and renewals:
New changes you will see for Vero Corporate ISR
List of assets considered for pool eligibility and those that aren’t
Description
Eligible for pool
*Note: These assets are subject to additional criteria for pool eligibility
New question you need to ask for Quotes and Amendments
- Is the policy holder Local, State or Federal Government?
- What is the residential floor space percentage at this location? Values between 0 and 100 for a small number of residential and strata ANZSICs.
- What are the sum insured for residential building and contents? Applicable for farming residences only.
ANZSICs that will trigger the new residential question
The following ANZSICs will trigger the new residential question "What is the residential floor space percentage at this location?" for new business and renewals:
Frequently asked questions
The Government is implementing a reinsurance pool for cyclones and related flood damage, which will be backed by a $10 billion Government guarantee and cover household, strata, and small business property insurance policies.
The intention of this pool is to improve insurance affordability for households and small businesses in high risk areas by lowering the cost of their insurance premiums. This is enabled by reducing the cost of reinsurance for these policies.
The pool will operate Australia wide but target support to cyclone-prone areas, which are mainly in northern Australia.
The Cyclone Reinsurance Pool legislation commenced on 1 July 2022, however large insurers have until 31 December 2023 to participate given the significant changes that will need to be made to systems and processes.
You can find more information on the Australian Government website.
Vero will commence pool participation from 30 June 2023.
Customers will not be notified directly, however they may notice premium adjustments on their renewal notice. Please note that some customers may not receive a premium reduction/change.
To realise the intended benefits of the Cyclone Reinsurance Pool, we need to record an accurate time of loss at claim lodgement. This means, during an event you are required to confirm with the customer what time the loss or damage occurred and pass this information onto Vero.
Claim notification forms have been updated to reflect this requirement for email lodgements. You will also need to provide the time of loss for online claim lodgements through the online portal, or phone lodgements.
There will be no immediate changes to your policy on 1 July 2022, as large insurers have until 31 December 2023 to participate in the pool.
Vero will ensure any Cyclone Reinsurance Pool savings will be passed through to our customers. However, please keep in mind individual customer premiums are typically impacted by a broad range of varying factors and risks that are independent of the cyclone component of their policy.
There is no change in coverage resulting from the implementation of this legislation.
