Texas Windstorm Insurance Association forecasts lower 2027 reinsurance needs

The Texas Windstorm Insurance Association (TWIA) has released preliminary budget information for 2027, forecasting a 10% reduction in its reinsurance and catastrophe bond requirements. This decrease is driven by a projected growth in the Catastrophe Reserve Trust Fund (CRTF), which is expected to rise from approximately $59 million at the end of 2026 to roughly $350 million by the end of 2027, provided no significant storms occur.

TWIA anticipates a 2027 risk transfer budget of approximately $173 million, down from nearly $210 million in 2026. This reduction is attributed to softer market pricing for reinsurance and catastrophe bonds, as well as a lower limit requirement. The association maintains its target to fund to a 1-in-50-year probable maximum loss (PML) level.

Regarding operations, gross operating expenses for 2027 are budgeted to decrease by nearly 9% compared to 2026. This is linked to a reduction in temporary claims staff following Hurricane Beryl and lower depreciation charges from improved online policy management systems. Additionally, the TWIA Board has adopted legislative recommendations for its Biennial Report to the Texas Legislature, including proposals regarding multidistrict litigation and FORTIFIED home construction.