The Texas Windstorm Insurance Association (TWIA) entered 2025 with a US$413.5 million deficit, reversing a US$45.9 million surplus reported at the same point last year.
The shift follows losses tied to Hurricane Beryl, a Category 1 storm that struck the Texas coast on July 8, and drained the association’s Catastrophe Reserve Trust Fund (CRTF).
Despite financial pressure, TWIA’s exposure and policy count continued to grow. State regulators reported that TWIA’s market share for wind and hail insurance in designated catastrophe areas now exceeds 50%.
At the end of the first quarter, the association had more than 276,000 active policies with total exposure surpassing US$117 billion, both record figures for the association, according to a report released on June 1, the official start of the Atlantic hurricane season.
TWIA’s first-quarter data showed total exposure reaching US$117.2 billion spread across 276,220 policies. Residential and manufactured homes accounted for approximately US$105 billion of this exposure, while commercial and governmental properties made up US$12.7 billion.
The geographic distribution of risk highlights concentrations in Galveston, Brazoria, and Nueces counties, indicating that these regions would bear a significant portion of insured losses in the event of major storms.
Hurricane Beryl, combined with spring storm activity, generated US$462.7 million in claims last year, making it the third-largest claims event in TWIA’s history. The losses exhausted the CRTF, forcing the association to rely more on other financing methods.
Hurricane Beryl alone resulted in over 31,000 claims filed with TWIA, further burdening the fund. The CRTF, which held around US$450 million at the start of the 2024 hurricane season, was depleted following payouts tied to Beryl and subsequent spring storms.
TWIA noted that it depends heavily on high-interest debt and reinsurance to fund claims. The association noted that the costs of these funding mechanisms slow efforts to rebuild the CRTF, which it said is a particularly urgent matter following the fund’s depletion after Hurricane Beryl.
Looking ahead, TWIA projected that exposure would increase further to US$122.9 billion by the end of 2025. Written premiums are forecast to rise to US$779.5 million in 2025, up from US$758.8 million the previous year. The association indicated that approximately half of premiums collected this year will be allocated to reinsurance purchases for the 2025 hurricane season.
The adequacy of TWIA’s rates continued to deteriorate in 2024. The association cited policy growth, an increased need for reinsurance, and higher construction costs driven by economic inflation as contributing factors. TWIA reported that residential rates were inadequate by 38%, up from 20% the previous year, while commercial rate inadequacy more than doubled to 45% from 22%, according to BestWire reports from July 2, 2024.
Despite recognizing the rate inadequacy, the Texas Department of Insurance rejected TWIA’s 10% rate increase request for personal and commercial lines in October. Regulators acknowledged the rates were inadequate but ruled that an increase would be "unjust" and "unfair" to coastal property owners, according to a BestWire report from Oct. 15, 2024.
Parallel to TWIA’s financial efforts, state lawmakers are considering legislation that would allow public funding for excessive losses and operating expenses. Proposed amendments to the Texas Insurance Code would permit the issuance of public securities to cover deficits from catastrophic events occurring before Jan. 1, 2026.
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