The Texas Windstorm Insurance Association (TWIA) reported a $41.6 million surplus in Q1 2026, reversing a year-end deficit, as it enters the 2026 hurricane season with $4.3 billion in available funding.
TWIA has entered the 2026 hurricane season on a stronger financial footing, reporting a $41.6 million surplus at the close of the first quarter - a significant turnaround from the $17.4 million deficit it recorded at year end.
The coastal insurer of last resort also deposited $39.1 million into the Catastrophe Reserve Trust Fund in May, representing its net gain from 2025 operations. The fund serves as a key financial backstop, available to cover losses and operating expenses when needed.
Heading into the 2026 storm season, TWIA said it has access to $4.3 billion in total funding from all sources. That figure encompasses premiums, the trust fund, state financing agreements, member company assessments, and reinsurance and alternative risk finance arrangements - a broad capital stack designed to ensure the association can respond to even a severe hurricane season.
The year-end deficit itself had already narrowed considerably from the prior year. At the close of 2024, TWIA's deficit stood at $413.5 million, making the swing to positive surplus territory by the first quarter of 2026 a notable improvement in the association's financial position.
Policy growth continued but showed signs of moderation. TWIA reported 286,251 policies in force through the first quarter, up from more than 276,000 a year earlier. Total insured exposures rose to $127.1 billion from more than $117 billion over the same period, with Galveston County accounting for approximately one-third of that exposure. From 2022 through 2024, the association grew at more than 10% annually.
Despite the uptick in policy count, TWIA flagged a shift ahead for written premiums. "Written premiums are projected to decline in 2026, marking the first decrease since 2020," the association said in its annual report. It attributed the expected dip to policyholders and their agents actively managing coverages and deductibles in an effort to keep premiums in check. Rates remain unchanged for 2026.
Even so, TWIA's 2025 rate adequacy analysis found that residential rates remain inadequate by 3% and commercial rates by 5%. Two pieces of legislation that took effect in September have helped close the gap, the association said. House Bill 3689 reduced reinsurance costs by shifting TWIA's probable maximum loss requirement from a 1-in-100 to a 1-in-50 standard, while House Bill 2517 exempted the association from premium and maintenance taxes — both meaningful improvements to the organization's cost structure.
TWIA also benefited from a quiet 2025 hurricane season, with no US-landfalling storms making impact on its coverage territory. That was not the case everywhere: On November 1, the coastal bend region was struck by hail as large as baseballs. TWIA said it received approximately 4,000 claims through April stemming from the event, with estimated losses and loss adjustment expenses of about $130 million from the severe storms.
For context on the broader Texas homeowners’ insurance market, the five largest writers of homeowners multiperil coverage in the state in 2025 - ranked by direct premiums written - were State Farm Group with a 19.66% market share, Allstate Insurance Group at 16.2%, USAA Group at 10.83%, Farmers Insurance Group at 7.86%, and Liberty Mutual Insurance Cos. at 5.84%, according to BestLink data.
As the 2026 hurricane season gets underway, TWIA's improved surplus position, legislative tailwinds, and expanded funding access provide a more resilient foundation than the association has had in recent years - even as premium revenue is expected to soften and rate adequacy gaps persist.
