View this article online: https://www.insurancejournal.com/news/southcentral/2016/05/27/410062.htm
While its reinsurance plans for the 2016 hurricane season haven’t yet been nailed down, Texas’ insurance company of last resort for wind and hail along the Texas coast expects to have around $4.9 billion in available funds for paying claims this year, if needed.
The Texas Windstorm Insurance Association (TWIA) says that’s enough funding to pay for claims that might result from more than 99 percent of all modeled hurricane seasons, or a 100-year season.
In a media briefing issued by the association in mid-May, TWIA broke down the expected funding for the current hurricane year. Claims first would be paid from premium on hand and the catastrophe reserve trust fund (CRTF). The funding structure was created in Senate Bill 900, which took effect on Sept. 1, 2015.
An estimated total of $4.9 billion in funding for 2016 would be sourced as follows (in descending order):
TWIA’s catastrophe bond reinsurance was issued in 2014 and 2015 by Alamo Re. It will reimburse TWIA for $1.1 billion in actual, aggregate losses from one or multiple catastrophic events in a year. The bond structure adjusts each year through 2018 to accommodate changes in available funding.
Alamo Re is a special purpose reinsurer that only insures specific losses for TWIA. Alamo Re sells shares in catastrophe bonds to investors and deposits the funds in trust accounts. In the absence of a loss, the proceeds are returned to investors at the end of the bond terms.
As of May 20, TWIA had not finalized its traditional reinsurance for 2016, according to Jennifer Armstrong, the group’s vice president for Communications and Legislative Affairs.
The association’s media briefing shows that as of March 31, 2016, TWIA had 268,832 policies in-force. Coverage for insured building and contents totaled $77.9 billion, and 6,691 insurance agents were registered to work with the association.
TWIA is authorized to write wind and hail policies in 14 coastal counties and in parts of Harris County. Galveston and Brazoria Counties together contain 49.6 percent of the association’s exposures. Galveston has 30.6 percent and Brazoria, 19 percent. The table below shows the exposure breakdown by county.
| County | Insured limits (building and contents) | Percentage |
| Galveston | $23,818,022,667 | 30.6% |
| Brazoria | 14,832,341,972 | 19.0% |
| Nueces | 14,522,384,548 | 18.6% |
| Jefferson | 8,857,625,039 | 11.4% |
| Cameron | 5,013,164,844 | 6.4% |
| San Patricio | 2,405,737,121 | 3.1% |
| Aransas | 2,382,059,396 | 3.1% |
| Chambers | 1,988,802,319 | 2.6% |
| Matagorda | 1,334,306,646 | 1.7% |
| Harris | 1,158,024,228 | 1.5% |
| Calhoun | 1,060,853,786 | 1.4% |
| Kleberg | 301,536,605 | 0.4% |
| Willacy | 127,314,037 | 0.2% |
| Refugio | 105,100,748 | 0.1% |
| Kenedy | 7,406,251 | 0.0% |
| All Counties | $77,914,680,207 | 100.0% |
Source: TWIA
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