TWIA Board Sets $6.227 Billion as 1-in-100 Probable Maximum Loss for 2025 Storm Season, Will Pursue $1.727 Billion in Reinsurance

The Texas Windstorm Insurance Association Board of Directors met on February 25 and voted to establish $6.227 billion as the Association’s 1:100 probable maximum loss (PML) for the 2025 storm season.   

The 1:100 PML is the level of losses that would be expected to be reached or exceeded only 1% or less of the time. This benchmark establishes the minimum amount of funding needed to meet TWIA’s statutory funding obligation for the upcoming storm season. In conjunction with the Association’s other statutory sources of funding, the 1:100 PML also determines the amount of reinsurance the Association must purchase. 

The Board voted to use a blend of models as follows: Aon’s Impact Forecasting (IF) 50%, Moody’s RMS 25%, CoreLogic’s RQE 25%, using the model results based on long-term assumptions, to result in a base PML of $5.415 billion. (IF, RMS, and RQE are catastrophe models commonly used in the property insurance industry to project potential losses.) The Board also voted to include a factor for loss adjustment expense (LAE) of 15% for a total PML of $6.227 billion.  

TWIA will pursue $1.727 billion in reinsurance on the most favorable terms that can be achieved in the market. This reinsurance funding is in addition to $2 billion in statutory funding and $2.5 billion in existing multi-year catastrophe bonds and reinsurance. This will bring TWIA’s total funding for the 2025 storm season to $6.227 billion, meeting the statutory minimum.  

In addition, the Board received reports from staff, including on 2024 finances and the Association’s intent to withdraw funds from the Catastrophe Reserve Trust Fund to pay claims from Hurricane Beryl. 

Members of the media with questions about the Board meeting, please email MediaRelations@TWIA.org.

The meeting materials and archived recording for the Board meeting are available on our Meeting Library page.