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Texas Windstorm Insurance secures $4.9B for 2017 reinsurance program

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Texas Windstorm Insurance secures $4.9B for 2017 reinsurance program

Texas Windstorm Insurance Association secured $4.9 billion in total funding for its reinsurance program, effective June 1 to May 31, 2018.

The funding included a contribution of $147 million to the catastrophe reserve trust fund from 2016 operations, which brought the fund's balance to almost $740 million. The company had a reduction in projected exposures and minor changes in the hurricane models that led to a decrease in the 100-year probable maximum loss for 2017 to $4.3 billion, down from $4.7 billion in 2016.

The program will provide $4.9 billion in total funding, enough to cover a 125-year storm season, or more than 99% of all possible seasons and in excess of the statutory minimum funding to a 100-year storm. The program will include catastrophe bonds, with a total amount of $1.1 billion, issued in 2015 and 2017.