The federal government’s cyclone reinsurance pool is delivering average premium savings of 38% on home insurance in the highest-risk areas, new statistics show.

The pool, backed by a $10 billion guarantee, triggered a political row when it launched in 2022, with Labor accusing the Coalition of inflating its likely benefits.

But the Australian Reinsurance Pool Corporation, which runs the scheme, has released two reports in the past week that shed light on its impact.

The corporation says its analysis of premiums “suggests general insurance affordability is now improving for people living in cyclone-prone regions across Australia”.

For home building insurance, those in the highest-risk areas, including population centres such as Broome and Townsville, have had an average premium cut of 38%, down from $9404 to $5870.

“This analysis shows there has been a significant reduction in average policyholder premiums for the highest-risk bands following entry to the cyclone pool,” one of the reports says.

The average premium in the lowest-risk bands increased 8% – from $2896 to $3117 – but ARPC says this was probably caused by market factors unrelated to the pool.

The report also indicates insurance availability pressures are easing, with quote success rates in the highest-risk areas increasing from 66% to 84%.

SME buildings and contents premiums have followed similar patterns, with premiums dropping 38% in the highest-risk areas and increasing 1% for the lowest risks.

The premium report only examines direct policies and no data is available on strata insurance, which is generally distributed via intermediaries.

ARPC has also released a statistical report showing that by the end of last year, the pool covered 95% of eligible risks. Its premium mix was 87% home and contents, 9% strata and 4% SME.

The pool offers discounts for risk mitigation initiatives such as roller doors, cyclone shutters and roof upgrades, and the report says $5.4 million was provided in discounts last year.

“The observed outcomes provide a meaningful signal that cyclone pool premium rates are achieving their intended objectives and leading to significant premium reductions for medium and high-risk policyholders,” the premium report says.

“Increases for low-risk policyholders are likely unrelated to the cyclone pool and suggest that premium reductions for medium- and high-risk policyholders may have been even greater if the introduction of the cyclone pool had not occurred in a high-inflation environment with increasing reinsurance costs.”

Click here to read the premium report and here to read the statistics report.