TWIA Committee Recommends Method for Determining Probable Maximum Loss for 2026 Storm Season 

Published on: October 23, 2025

The Texas Windstorm Insurance Association’s (TWIA) Actuarial & Underwriting Committee met on October 23 and developed a recommendation to the TWIA Board of Directors on a method of determining the Association’s 1-in-50 Probable Maximum Loss (PML) for the 2026 storm season.

Per Texas law, the 1-in-50 PML is the Association’s minimum required catastrophe funding level for each storm season. The 1-in-50 PML is a calculated estimate of the amount of loss TWIA would expect to exceed in two percent (1-in-50) or less of all possible storm seasons.

The Committee recommends the following method for determining the PML: 

  • Use of the commercially available catastrophe models Verisk Touchstone version 13, RMS RiskLink version 25, Impact Forecasting version 18, and Cotality RQE version 25. 

    • The models weighted such that those producing the highest and lowest PMLs for 2026 receive weights of 20% each, and the two remaining models receive weights of 30% each.
  • Use of model results based on long-term hurricane frequency assumptions. 

  • Inclusion of a loss adjustment expense factor of 15 percent. 

The Committee made its recommendation after receiving a presentation from Aon, the Association’s catastrophe modeling vendor.  

The TWIA Board is expected to consider the Committee’s recommendation and adopt a method of determining the 1-in-50 PML at its November 4 meeting. The Texas Insurance Commissioner may approve the Board’s selected method or may adopt a different method for the Board by February 1, 2026. 

The Association secures funding to meet its minimum required catastrophe funding level by purchasing reinsurance to supplement other sources of catastrophe funding provided by statute. The Board may also direct Association staff to purchase additional reinsurance above the 1-in-50 PML. Any reinsurance for coverage above the minimum required funding level would be paid for through assessments of TWIA’s member insurance companies, not from TWIA funds. Member insurance companies cannot recoup the assessments from policyholders.  

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

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