The Texas Windstorm Insurance Association (TWIA) expects to secure the full $1.23 billion in new reinsurance it needs to cover the largest possible loss in a 50-year event in the legacy market, with Gallagher Re’s Allen Cashin confirming yesterday that the program is now fully committed and will be signed within the next 24/48 hours, with rates online (ROL) comparable to last year.
In February, we reported that the board had adopted a $4.3 billion PML for the 2026 storm season after legislative reforms enacted in 2025 reduced the level of catastrophe financing required by TWIA from 1 in 100 to a 1 in 50 PML for the 2026 storm season. TWIA voted at the time to seek approximately $2.28 billion in new reinsurance protection to fill its risk transfer towers as well as $2 billion in statutory funding sources.
As we reported earlier this week, TWIA recently priced $750 million of Alamo Re Ltd. (Series 2026-1) catastrophe bonds, and the association also has $300 million of guarantees on Bluebonnet Re Ltd. (Series 2025-1) traded Class B and Class C notes remaining in effect, following imminent maturities and early redemptions, providing TWIA with $1.05 billion of risk transfer from capital markets to catastrophe bonds. 2026 typhoon season.
Prior to yesterday’s board meeting, it was unclear whether TWIA would obtain an additional $1.23 billion in reinsurance limits to meet the $2.28 billion level in traditional markets or the cat bond segment, particularly given favorable cat bond market conditions.
However, at the May 19 TWIA board meeting, when discussion focused on why TWIA had decided not to obtain more coverage from the catastrophe bond space, it was noted that the association needed to maintain a balance between market sources of risk capital, suggesting that remaining reinsurance coverage had all been obtained from traditional markets.
Cashin, head of North America projects at TWIA reinsurance broker Gallagher Re, commented on the 2026 placement at yesterday’s board meeting.
“This is our fifth year offering reinsurance, so we are extremely proud and grateful to be entering the reinsurance market on your behalf. The program is fully committed and will be signed off within the next 24/48 hours under staff guidance. All coverage is in compliance with the Board’s requirements, as is the financial security of the reinsurance market.
“We did issue $750 million in catastrophe bonds this year, as well as $300 million that was carried over from last year, all of which was done based on the budget that was discussed and approved at the last board meeting.
“So, I want to thank my team, my staff, my legal counsel. It was a big lift to work on this project and a lot of time and phone calls and emails went into it. So, thank you for giving me this opportunity and delivering a great outcome for Windstorm and its members,” Kassin said.
During the conference, Cashin also revealed that the cost of the risk transfer and reinsurance program in 2026 is just under $212 million, which equates to an online gross margin of 10%. This is comparable to the online rate for the 2025 plan, but it’s worth highlighting that TWIA purchased more reinsurance last year as it was required to purchase the 100-year PML level.
Cashin described the reinsurance market environment this year as “more favorable.”
He continued: “It’s certainly been a tough few years for reinsurance buyers. I think what the team and staff have done well this year is create an auction-like environment… “You have the ILS capabilities, primarily catastrophe bonds, and you have the traditional reinsurers around the world. What we did, which was months of preparation, was set up these two marketplaces to auction and compete for your business directly on the same layer. So catastrophe bond investors are basically asset managers, pension funds around the world, competing directly with the traditional reinsurance market, so it’s the best structure with the lowest price. “
At yesterday’s meeting, TWIA’s board of directors also approved a new $500 million credit line as an additional liquidity buffer in the event of a major storm, including an option to extend the line by an additional $200 million if needed.
