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TWIA locks in $2.28bn reinsurance package for 2026 under budget
TWIA said the 2026-2027 programme has a net cost of $199.4 million after ceding commission, driven by a slightly lower 1-in-50 PML and softer global reinsurance pricing.
The Texas Windstorm Insurance Association has completed its 2026 risk transfer programme, securing $2.28 billion of reinsurance coverage at a net cost nearly $26 million under budget, Reinsurance News said.
TWIA’s board set a $4.3 billion 1-in-50 probable maximum loss for the 2026 storm season in February, and later confirmed the residual insurer of last resort worked to obtain the needed protection from the traditional reinsurance market and capital markets. The programme includes $750 million of Alamo Re Ltd. catastrophe bond notes issued in connection with 2026, plus $300 million of continuing collateralised cat bond notes issued in 2025 from Bluebonnet Re.
Ahead of its August board meeting, TWIA confirmed the remaining $1.23 billion would come from the traditional market, completing the $2.28 billion total for the 2026-2027 programme. The traditional reinsurance and cat bonds are structured to attach at $2.025 billion of losses and LAE, extending up to the $4.305 billion level at the top of the tower.
TWIA reported that gross ceded premiums tied to the $2.28 billion coverage were $209.9 million, below the budgeted $237 million, with a rate-on-line of 9.21% versus 10.2% for the 2025-2026 programme. TWIA said the favorable budget variance reflects the PML being set slightly below initial budget assumptions and a softening of the global reinsurance market, contributing to lower overall reinsurance costs.