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TEXAS
TWIA Board Approves 2025 Budget With $485 Million Ceded to Reinsurers

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CORPUS CHRISTI, Texas //BestWire// - The Texas Wind Insurance Association’s board of directors approved its 2025 budget, which includes a line item for $485 million in reinsurance that is needed due to a depleted catastrophe reserve fund and growing exposure base.



The reinsurance budget request is up from $397 million TWIA spent on its reinsurance program this past year, according to documents from the board meeting. The program offered protection for aggregate losses of $2.45 billion to $6.5 billion.

In November, TWIA said Hurricane Beryl’s projected costs of $455 million would roughly equal the total held in its catastrophe reserve trust fund. Overall, TWIA projects $492 million in losses for this fiscal year and expects to run a $442 million deficit (BestWire, Nov. 15, 2024).

“We do expect that the association will need to purchase additional reinsurance over 2025, but that exact amount will depend of course on the board's determination of the 100-year PML (probable maximum loss),” James Murphy, TWIA chief actuary and vice president of enterprise analytics said during the meeting. “However, we know that we'll at least need to replace the $450 million from the trust fund.”

The increase in reinsurance is also necessary because of a 10% increase in policy count and a 20% year-on-year increase in insured exposure during the past year, according to TWIA.

TWIA will have a $40.27 million total operating budget for 2025, which is up from $40.24 million earmarked for 2024.

In addition to the budget and reinsurance items, the board also approved a 3.5% raise for TWIA General Manager David Durden and discussed filling the board’s vacant chair and vice chair positions. TWIA expects to fill the vacancies at its next meeting in February.

The five largest writers of homeowners multiperil coverage in Texas in 2023, based on direct premiums written, were: State Farm Group, 18.88%; Allstate Insurance Group, 14.87%; USAA Group, 10.23%; Liberty Mutual Insurance Cos., 8.43%; and Farmers Insurance Group, 7.33%, according to BestLink.

(By Steve Hallo, senior associate editor, BestWire: Steve.Hallo@ambest.com)


Texas Reinsurance Homeowners Insurance Property And Casualty Insurance Windstorms


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