At a Board meeting of the Texas Windstorm Insurance Association (TWIA) today, attendees heard that the catastrophe bond and reinsurance placement for 2025 is “looking good” while also noting that the projected rate-on-line (RoL) for the placement looks to be lower than the prior year, as the market has softened somewhat.Gallagher Re, the reinsurance broker for the Texas Windstorm Insurance Association (TWIA) provided an update on the TWIA cat bond placement and reinsurance renewal so far in 2025.Allen Cashin, Head of Programs, North America for Gallagher Re explained at the TWIA Board meeting that, “The placement renews at June 1st.The traditional is 12 month covers the cat bonds are typically two or three year terms, and the programme at this time is looking very good.

“All of the reinsurance will be done well in advance of the June 1 inception date.It will probably be done fully next week, and it’ll be placed well below the budget that was approved by the board in the last meeting.” TWIA originally set a budget to spend as much as $485 million to secure its cat bonds, reinsurance and risk transfer for 2025.Cashin said that, “The rate-on-line is 9.84% projected and that’s a projected spend of $416 million for the 2025 season.” James Murphy, Chief Actuary of TWIA qualified the rate level by saying, “I think by and large, after taking into account the increase in our exposures, rates-on-line that we’re seeing in the market right now are flat, if not potentially down a little bit from last year.” Cashin, of Gallagher Re, further said, “It’s pretty amazing with a $50 billion California wildfire this year, in January, approximately $20 billion of that was ceded to the reinsurance market.

So, it is interesting that reinsurance prices are coming down a little bit despite one of the biggest cat losses we’ve ever had in the US.That tells you the amount of capital in the reinsurance market.“Attracting new investors that want to support Texas Windstorm only brings in more asset managers and reinsurers that want to support it, thus more competition in the price.” On the placement of the new catastrophe bond for TWIA, Cashin noted that the deal is expected to complete next week.

“The amount of cat bonds issued this year, while it’s not determined until the next couple of days, will likely be $500 million,” Cashin said.Which aligns with the upsized target for the Bluebonnet Re 2025-1 cat bond that .Cashin also said, “That does not include the FAIR Plan.

The FAIR Plan will be another $200 million just for them.So they are separate.” Which also aligns with on the Texas FAIR Plan Associations Bluebonnet Re Series 2025-2 cat bond issuance.Cashin further stated on the cat bonds, “The cat bonds allow you to give investors a range of the limit and the price, and then we adjusted it a couple of days ago.

So the price on two of the tranches came down, below the lowest price that we’d set.So two of them came down, and you’re able to increase the amount of limit as well.So we are discussing with investors now, and it will be finalised sometime later this week, early next week.” As a reminder, with as much as $500 million of reinsurance set to come from the new Bluebonnet Re 2025-1 catastrophe bond, TWIA looks set to have as much as $2.4 billion of cat bond limit in-force for 2025..

All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.