TWIA polishes off last $1bn leg in 2023’s $4.5bn reinsurance tower

The Texas state insurer of last resort, the  Texas Windstorm Insurance Association (TWIA), polished off its 2023 hurricane season reinsurance programme ahead of deadline, tying down the final targeted $1.04 billion traditional reinsurance programme to hit its $4.508 billion target limit.

"It is complete up to the PML determined earlier this year by the board at $4.508 billion, a combination of $1.2 billion of catastrophe bonds and an additional just over $1 billion of traditional reinsurance," TWIA chief actuary Jim Murphy told a TWIA board meeting.

The new traditional program, secured by TWIA’s broker Gallagher Re, covers $1.043 billion excess of $2.965 billion alongside $500 million in fresh cat bond issuance from unit Alamo Re.

Existing 2021 issuance from Alamo Re covers $500 million from $2.47 to $2.97 billion and another $200 million from 2022 stretches down to the $2.27 billion attachment point. Below that, member assessments and public securities.

The TWIA board additionally authorised renewal of a $500 million credit line from JP Morgan and Bank of America for early hurricane triage, if necessary.

TWIA had officially targeted the total limit of $4.5 billion to just hit its 1:100 PML minimum mandate, but had also looked at, then rejected, other options including ILWs which would hit an alternative PML calculation at $5.2 billion.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.