TWIA Sees 46% Drop in Reinsurance Needs for 2026 After Texas Legislative Changes
Texas Windstorm Insurance Association (TWIA) anticipates a significant reduction in its reinsurance requirements for the 2026 wind season, thanks to recent legislative changes. The Texas Legislature passed HB 3689, primarily supported by key members like Representative Dustin Burrows and Senator Brandon Creighton, aiming to lower TWIA's risk and reinsurance costs.
The bill's impact is substantial. TWIA's minimum required funding level for 2026 has fallen to $4.5 billion, leading to a potential reinsurance requirement of $2.3 billion for the 2026 season, a 46% reduction from the 2025 level of $4.227 billion. This decrease is primarily due to the lowering of the coverage standard from a 1-in-100-year storm to a 1-in-50-year event.
Consequently, TWIA's reinsurance spend for 2026 is projected to drop by 43% year-on-year, from $416.5 million in 2025/26 to $237 million in 2026. This reduction aligns with the projected decrease in policies in force, which are expected to decrease slightly from 282,862 at the end of 2025 to 277,357 at the end of 2026, a decrease of 5,505 policies. Direct Written Premiums are also projected to decrease by $37 million (4.5%) from $818.0 million in 2025 to $781 million in 2026.
The passage of HB 3689 has significantly impacted TWIA's financial outlook for the 2026 wind season. With a projected 46% reduction in reinsurance requirements and a 43% decrease in reinsurance spend, TWIA is better positioned to manage its risks and costs. These changes are expected to have a positive impact on the association's financial health, while also potentially leading to lower insurance premiums for policyholders.
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