TWIA renewal came in almost 12% under budget. Staff to recommend Gallagher Re continue

The Texas Windstorm Insurance Association’s (TWIA) reinsurance and catastrophe bond renewal for 2026 came in almost 12% under its budgeted spend for the coverage, while at a meeting later today its staff will recommend it continues with Gallagher Re as its reinsurance broker.

Recall that, at the mid-year renewals TWIA secured roughly $2.28 billion of risk transfer and reinsurance, with the catastrophe bond market supplying $1.05 billion of that limit for the 2026 contract year.

Documents for a TWIA board meeting to be held later today now disclose the costs of the renewal and provide a finalised reinsurance tower diagram for the residual market, or insurer of last resort.

In cost terms, gross ceded premiums related to the $2.28 billion in reinsurance and cat bond coverage totaled $209.9 million, lower than the budgeted estimate of $237 million.

The net cost of TWIA’s 2026 reinsurance program came out at $199.4 million, which is almost 12% under the budgeted amount of $225.2 million.

TWIA’s staff will explain that, “The favorable budget variance is a result of the PML being set slightly below the initial estimate incorporated into the budget as well as a softening of the global reinsurance market, resulting in lower reinsurance costs overall.”

On a rate-on-line (ROL) basis, it seems TWIA’s program came in around 10% down on the prior year, with an overall ROL for the 2026 reinsurance tower of 9.21%, compared to 10.2% a year earlier.

You can see TWIA’s finalised 2026 reinsurance tower below:

TWIA’s board is also set to choose its reinsurance broker for the coming years after an RFP process, the first since 2021.

This time though, the TWIA board has asked staff to run the RFP process and then make a recommendation as to which reinsurance broker to choose.

The board documents show that only two reinsurance brokers responded to the RFP, incumbent Gallagher Re and Guy Carpenter.

TWIA’s staff are set to recommend the board choose Gallagher Re to continue in the reinsurance broker role, saying, “The evaluation committee overall scored the response from Gallagher Re slightly higher than the response from Guy Carpenter. This, coupled with recent successful reinsurance placements and an acknowledgement of the potential disruption a change in vendor could cause, led the evaluation committee to unanimously recommend that Gallagher Re continue in its role as reinsurance broker for TWIA.”

TWIA’s staff are now set to run an RFP for the catastrophe risk modeller role, which is currently filled by Aon’s Impact Forecasting. Similar to the broker RFP, the staff are going to run the process and bring a recommendation to TWIA’s board in November.

TWIA has been directly sponsoring catastrophe bonds since 2014 and you can read about every one in our Deal Directory.