The Texas Windstorm Insurance Association Board voted Feb. 2 to select Aon to perform catastrophe modeling analysis to satisfy the Board’s statutorily required determination of the Association’s 1-in-100-year probable maximum loss (PML) for the 2022 hurricane season and reinsurance purchase decision.
For the first time, TWIA chose a firm to specifically to provide catastrophe modeling analysis for determining the 1-in-100 year PML and reinsurance purchase decision. A law passed last year requires TWIA to use a catastrophe modeling analysis from a separate source than its reinsurance broker, Gallagher Re.
TWIA’s 2021 catastrophe funding program, effective through May 31, 2022, provides access to $4.03 billion in total funding, including $830 million of traditional reinsurance, $1.1 billion in new and previously outstanding catastrophe bonds and $2.1 billion of total statutory funding sources. TWIA’s Catastrophe Reserve Trust Fund (CRTF) balance is $179 million.
Total funding for TWIA’s 2021 catastrophe funding program is down from $4.2 billion in 2019 and 2020. TWIA did not contribute to its CRTF in 2020, primarily because of losses resulting from that year’s hurricane season.
According to Aon’s website, its catastrophe modeling analysis is built on Cat Score, a proprietary web-enabled location-level pricing tool that provides real time estimate of the full cost of bearing cat risk including cost of capital and cost of reinsurance.
Topics Catastrophe Reinsurance Aon
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