The Texas Windstorm Insurance Association (TWIA) is targeting at least $2.1 billion of reinsurance protection for the 2019 hurricane season from a combination of the traditional and alternative reinsurance markets, following approval from its Board.
TWIA, the residual market property insurer for the state of Texas, will work with reinsurance broker Guy Carpenter to secure cover to be placed on top of its $2.1 billion in statutory funding sources.
TWIA’s funding sources include the Catastrophe Reserve Trust Fund and alternating layers of industry member assessments and public debt securities that may be issued to fund losses from cat events.
It’s worth noting that TWIA may not have to buy the full $2.1 billion of reinsurance protection, as some existing cover is multi-year and will still be in-force from the previous renewal.
The company just has to ensure it has aggregate total claims-paying capacity of at least $4.2 billion.
“TWIA is committed to the financial security of our policyholders, and we look forward to securing a reinsurance program for the 2019 season that provides us with sufficient capacity and liquidity to pay policyholder claims and meet our financial obligations, as we have done successfully since 1971,” explained John Polak, General Manager of TWIA.
The company’s current funding structure requires capacity sufficient to cover, at a minimum, a catastrophe year with a probability of one in 100.