The Texas Windstorm Insurance Association (TWIA) has announced that its required reinsurance for the 2026 wind season could fall significantly to $2.3 billion, after recent legislative changes in Texas halved the state-mandated loss funding requirement.
As we previously reported, Texas House Bill 3689 lowered the coverage standard from a 1-in-100-year storm to a 1-in-50-year event, a change expected to let TWIA scale back its reinsurance and other risk transfer purchases.
For 2025, TWIA’s 1-in-100-year probable maximum loss funding level was set at $6.227 billion, requiring roughly $4.227 billion of reinsurance for the hurricane season.
A new presentation prepared ahead of next week’s TWIA Board meeting shows that the minimum required funding level for 2026 has fallen to $4.5 billion.
As a result, TWIA’s reinsurance requirement for the 2026 season could drop to just $2.3 billion, a 46% reduction in the amount needed to meet its statutory funding obligations at next year’s renewals.
With this in mind, Direct Written Premiums are projected to decrease by $37 million (4.5%), from $818.0 million in 2025 to $781 million in 2026.
Meanwhile, ceded premiums for 2025/26 reinsurance were $416.5 million at the purchase date, while the current placeholder for 2026 is $237 million, meaning TWIA’s reinsurance spend for 2026 could drop by 43% year-on-year.
In the presentation, TWIA also suggested that Policies in force are projected to decrease slightly from the forecast of 282,862 policies at December 31, 2025, to 277,357 at year’s end 2026, a decrease of 5,505 policies.
