The Texas Windstorm Insurance Association (TWIA) board of directors convened on Nov. 13 to review details of the association’s proposed 2025 budget. The budget presentation outlined several key challenges and projections for the coming year.
In its report, TWIA anticipates increased reinsurance costs in 2025 due to the need for additional coverage following the depletion of the Catastrophe Reserve Trust Fund. The fund was used to pay losses and adjustment expenses stemming from Hurricane Beryl, along with rising policy exposures.
As of Sept. 30, the ultimate loss and loss adjustment expense estimate for Hurricane Beryl is $455 million, which is approximately equal to the current balance in the reserve fund.
From January to June 2024, severe convective storms and other non-hurricane-related losses totaled $172 million, significantly exceeding the budgeted amount of $81.6 million for the same period. The association noted that this increase reflects the heightened frequency and severity of weather-related events in recent years.
TWIA has observed steady growth in policy counts, exposures, and premiums since February 2021, driven by the ongoing contraction of coverage offered by the private market. Written premiums for 2025 are projected to reach $779 million.
The number of policies in force is expected to increase from 271,964 at the end of 2024 to 284,975 by year-end 2025, representing a 4.8% rise, or an additional 13,011 policies.
It is worth noting that last month, Texas Commissioner of Insurance Cassie Brown denied TWIA’s proposed 10% increase in residential and commercial rates for 2025.
Meanwhile, the board is scheduled to make final decisions regarding the 2025 budget at its next meeting on December 10 in Corpus Christi.
During the November meeting, TWIA’s general manager announced the appointment of Greg Smith to the board as a first tier coastal representative by the Texas insurance commissioner. Smith, who serves as CEO of Pioneer Resorts Inc in Port Aransas and is a former Corpus Christi City Council member, participated in board member training during the meeting.
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