TWIA committee’s PML recommendation hits new high for 2024 storm season
TWIA committee’s PML recommendation hits new high for 2024 storm season | Insurance Business New Zealand
Insurance News
TWIA committee’s PML recommendation hits new high for 2024 storm season
It marks a $2 billion increase from the previous year
Insurance News
By
Kenneth Araullo
The Actuarial & Underwriting Committee of the Texas Windstorm Insurance Association (TWIA) has reached a unanimous decision to advise the TWIA board of directors to set the association’s 1:100 probable maximum loss (PML) for the 2024 storm season at $6.5 billion.
The 1:100 PML represents the estimated maximum loss TWIA could face in a catastrophe year – with a 1% chance of occurring.
In determining the PML, the committee also recommended a 75%/25% combination of RMS and AIR catastrophe models, based on long-term predictions, leading to an initial PML estimate of $5.67 billion.
Factoring in approximately 15% for loss adjustment expenses (LAE), the committee adjusted the total PML to its current figure, with this recommendation informed by public input and catastrophe model analyses provided by Aon, TWIA’s catastrophe modeling partner.
The recommendation comes against the backdrop of TWIA experiencing a significant policy increase over the past year, with over 25,000 new policies, and a 26.4% rise in the total insured value of properties under its coverage.
The proposed $6.5 billion PML for 2024 also marks a substantial $2.0 billion increase from the previous year’s $4.5 billion PML.
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