TWIA Board Establishes $4.3B as 1-in-50 Maximum Loss Estimate for 2026 Storm Season
The Texas Windstorm Insurance Association (TWIA) board has officially approved a significant $4.3 billion as the association’s 1-in-50 probable maximum loss (PML) for the upcoming 2026 storm season. This decision marks a crucial step in ensuring the financial stability of the association as it prepares for potential storm-related losses.
The 1:50 PML represents the level of losses that TWIA expects to exceed only 2% of the time on an annual basis. This benchmark is essential as it establishes the minimum amount of reinsurance necessary to fulfill TWIA’s statutory funding obligations for the forthcoming storm season.
The board’s vote took place on Tuesday, following recent changes enacted by the Texas Legislature. These changes have reduced TWIA’s minimum required catastrophe funding level. Previously, the association was mandated to secure funding based on a 1-in-100 probable maximum loss, indicating that losses would be expected to be exceeded 1% of the time annually.
In 2025, the TWIA Actuarial & Underwriting Committee developed a recommendation for the board regarding the method to determine the association’s 1-in-50 probable maximum loss for the 2026 storm season. This recommendation was pivotal in guiding the board’s recent decision.
Looking ahead, TWIA plans to pursue $2.28 billion in reinsurance for the 2026 hurricane season. This amount will encompass both new coverage and existing multi-year catastrophe bonds, all aimed at securing the most favorable terms possible. This reinsurance funding is in addition to the $2 billion in statutory funding sources already in place.
On November 4, the TWIA board also voted on the association’s 2026 operating budget. The budget outlines a projected increase in net operating expenses, rising from 5.2% of earned premium in 2025 to 5.5% in 2026. This increase reflects the association’s ongoing commitment to maintaining operational efficiency while preparing for the challenges of the upcoming storm season.
Topics
Profit Loss
Windstorm
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The Texas Windstorm Insurance Association (TWIA) board has officially approved a significant $4.3 billion as the association’s 1-in-50 probable maximum loss (PML) for the upcoming 2026 storm season. This decision marks a crucial step in ensuring the financial stability of the association as it prepares for potential storm-related losses.
The 1:50 PML represents the level of losses that TWIA expects to exceed only 2% of the time on an annual basis. This benchmark is essential as it establishes the minimum amount of reinsurance necessary to fulfill TWIA’s statutory funding obligations for the forthcoming storm season.
The board’s vote took place on Tuesday, following recent changes enacted by the Texas Legislature. These changes have reduced TWIA’s minimum required catastrophe funding level. Previously, the association was mandated to secure funding based on a 1-in-100 probable maximum loss, indicating that losses would be expected to be exceeded 1% of the time annually.
In 2025, the TWIA Actuarial & Underwriting Committee developed a recommendation for the board regarding the method to determine the association’s 1-in-50 probable maximum loss for the 2026 storm season. This recommendation was pivotal in guiding the board’s recent decision.
Looking ahead, TWIA plans to pursue $2.28 billion in reinsurance for the 2026 hurricane season. This amount will encompass both new coverage and existing multi-year catastrophe bonds, all aimed at securing the most favorable terms possible. This reinsurance funding is in addition to the $2 billion in statutory funding sources already in place.
On November 4, the TWIA board also voted on the association’s 2026 operating budget. The budget outlines a projected increase in net operating expenses, rising from 5.2% of earned premium in 2025 to 5.5% in 2026. This increase reflects the association’s ongoing commitment to maintaining operational efficiency while preparing for the challenges of the upcoming storm season.
Topics
Profit Loss
Windstorm
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