Updated Independent Report on TWIA Rate Adequacy Now Available for Public Review

The Texas Windstorm Insurance Association’s (TWIA) Actuarial & Underwriting Committee will meet on Tuesday, December 1 to review updated information from an independent report on TWIA’s rate adequacy by consulting firm Willis Towers Watson (WTW) and develop a report/recommendation to the Board of Directors. The updated information is available for public review.

Incorporating the updated information, WTW’s revised indications are that TWIA’s rates are inadequate by 26% for residential coverage and 44% for commercial coverage.

At its September 22 meeting, the Committee reviewed an independent report by WTW on TWIA’s rate adequacy and the use of hurricane modeling in estimating potential losses in its rate-setting process. The Committee directed WTW and TWIA staff to work together to incorporate additional data into an updated report.

The following documents present the updated information:

• Revised Commercial Rate Exhibit
• Revised Residential Rate Exhibit
• Revised Data Audit Report of Exposures with Secondary Characteristics
• Modeling Results, comparing October 2020 report with revised November 2020 Report (with improved data quality)
• Summary of Results, including:
  • PML determination exhibit for Current vs WTW Original vs WTW Revised
  • Gross Hurricane Average Annual Loss (AAL) for WTW Original vs WTW Revised; used for the rate indication (split residential vs commercial)
  • Reinsurance Expense Exhibit for WTW Original vs WTW Revised

Results presented in or used in the production of the WTW report are derived from the proprietary catastrophe models of the corresponding vendors and may not be used for any purpose other than in connection with analysis and review by TWIA, its committees, Board and staff.

If you are a member of the media, you may send inquiries to mediarelations@twia.org.