The Texas Windstorm Insurance Association (TWIA) has announced that it’s financially prepared for the 2017 hurricane season with a comprehensive reinsurance programme, that includes two catastrophe bond transactions.
TWIA’s 2017 reinsurance programme runs from June 1st 2017 to May 31st, 2018, and provides the entity with $4.9 billion in total aggregate funding. This is enough to cover a 125-year storm season, or over 99% of all possible storm seasons in excess of the statutory minimum funding to a 100-year storm, explains TWIA.
The reinsurance programme includes two catastrophe bond transactions, Alamo Re Ltd. (Series 2015-1) and Alamo Re Ltd. (Series 2017-1), which combined provide $1.1 billion of cover against Texas named storms and severe thunderstorms. TWIA explains that the bonds provide staggered expirations “in order to provide multi-year stability, diversification, and expanded claims-paying capacity.”
Once again, says TWIA, it has secured $4.9 billion in total funding, which includes a $147 million contribution to the Catastrophe Reserve Trust Fund (CRTF), taking the CRTF balance to its highest ever, of almost $740 million.
Furthermore, the entity explains that it witnessed a reduction in projected exposures and some minor changes in hurricane models that resulted in a decline in the 100-year Probable Maximum Loss (PML) for 2017, from $4.7 billion to $4.3 billion.
John Polak, TWIA General Manager, said; “Every year, TWIA pushes itself to surpass the funding expectations of the year. This is evidence of TWIA’s commitment to ensure the financial sustainability of the enterprise to provide quality service to our policyholders, and operate efficiently to achieve the best use of policyholder funds.
“We want all our stakeholders to be confident that TWIA remains fiscally responsible and prepared to pay claims should a catastrophic event occur.”