Operational Efficiency and Performance


  • TWIA’s operating expenses are only 5% of premium, the third lowest of 36 residual market plans.
  • Average expense for all other plans is approximately 30% of premium
  • Industry average for Texas carriers is over 12% of premium
  • TWIA’s operating expense per policy is approximately $75
  • TWIA controllable expenses have been below budget for four consecutive years.
  • Audits performed by the Texas Department of Insurance and independent external auditors in 2014 confirmed the effectiveness of operational improvements and found no material weaknesses or issues in operational or financial controls.

Operational Costs

TWIA issues almost 300,000 policies each year with premiums of approximately $500 million. TWIA’s costs associated with policy issuance, billing, and other operations of the Association are only 5% of the premiums collected. This is less than half the average cost for other insurance companies in Texas (12.5%).

Process and System Improvements

TWIA has successfully implemented several new systems and initiatives in recent years to automate and improve its underwriting, policy issuance and billing processes allowing policies to be issued more quickly and at a lower administrative cost. Highlights include:

  • Installing a dedicated billing system consistent with industry best practices
  • In-sourcing document production to better integrate with our other internal processes, reducing the time and costs associated with both incoming and outgoing mail
  • Reorganizing the Underwriting department to more effectively manage workflows, reducing seasonal backlogs
  • Incorporating risk visualization into the inspection process, using aerial imagery and third-party data to assess insurability more efficiently, rate more accurately, and increase the total number of property inspections while reducing the cost per inspection on a per policy basis.
  • TWIA is implementing a new, more modern policy administration system called Policy Center providing numerous benefits to agents and insureds including:
    • More payment options and opportunities for agent self-service
    • Automated, rules-based determination of eligibility
    • Immediate policy issuance under most circumstances

Financial Performance

  • In 2015, TWIA contributed $262.7 million from 2014 operations to the Catastrophe Reserve Trust Fund
  • TWIA currently has $1.1 billion in cash immediately available after a storm to pay claims
  • Secured the highest level of funding for the 2014 hurricane season since 2009, with up to $3.85 billion in total funds available to pay claims – over $1 billion more than the total projected cost of Hurricane Ike
  • Issued $500 million in pre-event Class 1 public securities to provide immediate claims-paying capacity after a storm and additional protection to coastal residents, with no associated impact on rates
  • Issued the Association’s first catastrophe bond as part of the overall reinsurance program, diversifying and expanding claims-paying capacity
  • The State Auditor’s Office has found that the Association’s controls produce accurate financial information and help ensure accountability for funds

Claims Performance

  • Improvements in claim handling processes and recent legislative changes have enabled 99% of claims to be resolved without dispute
  • TWIA adjusts claims in approximately seven days from the time a claim is filed to payment to the policyholder
  • TWIA received complaints on less than 0.5% of claims in 2013, the latest year available – better than the industry average and second only to USAA among the top five Texas homeowners carriers
  • TWIA continues to receive positive customer survey results from policyholders after a claim, averaging 4.6 out of 5 in 2014

Policyholder Service

  • TWIA will be implementing a new, more modern policy administration system beginning May 1, 2015, providing additional efficiency and automation of policy administration
  • TWIA received 318 agent and policyholder survey responses in 2014, with over 52% rating underwriting performance as 9 or higher out of 10