The Australian Reinsurance Pool Corporation (ARPC) has praised the nation’s new terror alert system, which will result in more information being passed to the public.

The changes were agreed by the Council of Australian Governments last month and should be in place by the end of the year.

Under the current set-up the terror threat ranges between low, medium, high and extreme. Australia’s current threat level is high.

The number of stages will be increased from four to five and relabelled: not expected, possible, probable, expected and certain.

More specific information will also be given in relation to the types of threat.

ARPC CEO Chris Wallace explained the changes at last week’s Claims Convention in Sydney.

“The increased granularity of threat levels and non-classified information being made available to the public is a good enhancement of the threat system,” he told insuranceNEWS.com.au.

“It has an impact on the industry and we will be communicating with our stakeholders.”

The ARPC was established in 2003 to tackle a global withdrawal of terrorism insurance after the September 11 2001 attacks on the US.

Dr Wallace told the convention such pools are an effective way to mitigate the real and increasingly global threat of attacks.

He says not reinsuring with the ARPC exposes insurers to major losses.

A major attack could leave the top three Sydney CBD insurers each facing losses of about $1 billion, almost double their current combined capital base.

Publication of a Treasury review of the ARPC’s future, held every three years, is still pending.

The Claims Convention is a joint venture between the Australasian Institute of Chartered Loss Adjusters and the Australian and New Zealand Institute of Insurance and Finance.