The Australian Reinsurance Pool Corporation (ARPC) received premium revenue of $129.7 million in the year to June 30, up 1.9% on the previous year and 2.9% better than expected.

The terrorism pool’s operating result of $71.4 million was down 1.4% but was 10.9% better than planned, according to the annual report.

This fall was mainly due to a 21.6% reduction in investment income to $26.5 million.

The pool was established following the September 2001 attacks on the US, which resulted in a global withdrawal of terrorism insurance.

It provides reinsurance cover to 220 insurers and has capacity of $13.6 billion, including the $10 billion Commonwealth guarantee and $2.9 billion in retrocession reinsurance.

While insurers must provide terrorism cover, participation in the pool is voluntary.

Treasury is currently reviewing the Terrorism Insurance Act 2003, which established the ARPC, and will report back by January 23.

The review, which takes place every three years, will consider whether the Act is still required.

ARPC CEO Christopher Wallace says while “some market commentators” believe the private reinsurance market has the capacity and appetite to provide required cover, he does not.

“Recent experience in testing the market availability demonstrates this is not yet the case for the whole market, and only limited capacity exists for individual risks.”

To date the ARPC has paid the Government $325 million in dividends as reimbursement for the Commonwealth guarantee, with another $450 million to be paid over the next four years.