The Texas Windstorm Insurance Association (TWIA) has projected reinsurance costs for 2026 to be lower than in previous years, following a change in state law that reduces TWIA’s minimum required catastrophic funding for each storm season.
The association’s board of directors has approved a 2026 operating budget with net operating expenses set at US$44.7 million, representing 5.5% of earned premiums. This marks a slight increase from 5.2% in 2025.
The law lowers the association’s probable maximum loss requirement from a 1-in-100-year event to a 1-in-50-year event. The budget includes a US$237 million placeholder for reinsurance costs, though the final figure could change depending on market conditions or growth in TWIA’s exposures
Earlier this year, TWIA implemented a blended catastrophe modeling approach for its reinsurance program, using models from Aon’s Impact Forecasting, Moody’s RMS, and CoreLogic’s RQE. This modeling set the 1:100 probable maximum loss at US$6.227 billion, which established the minimum funding TWIA was required to secure under state law.
The 2025 funding strategy included US$1.727 billion in reinsurance, US$2 billion in statutory funding, and US$2.5 billion in multi-year catastrophe bonds and reinsurance, bringing total storm season funding to US$6.227 billion.
The need for enhanced reinsurance protections was underscored by Hurricane Beryl in 2024, which resulted in a US$455 million loss for TWIA and nearly depleted its Catastrophe Reserve Trust Fund.
TWIA expects written premiums to decline to US$781 million in 2026, down from US$818.1 million the previous year.
The board also addressed internal matters during its recent meeting, filling three vacant officer positions and approving a 3.85% salary increase for the association’s general manager. As of September 30, TWIA reported a 5% year-over-year increase in policies in force, with a retention rate of 88%. However, the number of new policies issued fell by 5%.
Jim Murphy, TWIA’s chief actuary, noted that while the in-force policy count is up for the year, it has been experiencing regular monthly declines.
“That’s why we tend to describe our growth as leveling out,” Murphy said. “We’re hopeful that at some point in the near future those numbers will get closer to zero and maybe even turn negative.”
