The Actuarial & Underwriting Committee of the Texas Windstorm Insurance Association (TWIA) has recommended the organisation contract with broker Aon for its catastrophe modelling services.
A request for proposals in October 2021 from the TWIA saw propositions put forwards by Aon for $600,000 and $1.6m, respectively. The Committee recommended at this time that TWIA opt for the higher proposal.
However, the Board of TWIA directed the re-issuance of the request for proposals, which would occur in mid-December.
Following this, further proposals were received from Aon, Guy Carpenter, and Verisk.
However, TWIA have announced this week that its Actuarial & Underwriting Committee had recommended Aon.
Aon’s second option was to provide additional analytics support centred around the TWIA View of Risk, which the insurer called ‘customised and independent’.
Accompanying documents from Aon said: “A custom View of Risk (VoR) affords TWIA a platform to better understand why TWIA’s exposures are unique and to make more informed funding and risk management decisions that ultimately protect policyholders and member companies, and increases the resiliency of the Association.”
Aon listed three specific impacts from the proposed deal. These were a deeper knowledge of existing vendor methodologies and potential model miss, a comprehensive understanding of the impact of the TWIA’s portfolio characteristics on potential loss outcomes, and increased post-event resiliency through more-informed funding and reinsurance purchasing decisions.
This move by the TWIA towards Aon is not a surprise. In November, it was reported that the company would pivot to Willis Re for its reinsurance broking needs, terminating its ongoing relationship with Guy Carpenter. It was at this point that the Committee reportedly recommend Aon be chosen to provide catastrophe modelling risks.
