The excess and surplus lines market saw another banner year of premium growth in 2023, rising 14.6% to reach $72.7 billion, according to new figures released by the Wholesale & Specialty Insurance Association (WSIA).
“We continue to see the commercial property market’s premiums exhibit a noteworthy surge in response to current market conditions. This uptrend is attributed to the hardening of prices, as well as a decrease in policy counts,” said Mark Shealy, executive director of the Florida Surplus Lines Service Office, in a statement. “To a lesser degree, the increase can also be attributed to a more subtle increase in excess commercial general liability policies.”
The 2023 numbers build upon 2022, when the E&S premium reached $63 billion with 24.1% growth, according to the report. The slower pace of growth indicates a stabilization, but still a strong response from the E&S market to “surging market demands,” according to David Ocasek, CEO of the Surplus Line Association of Illinois.
“Premium volume in both the auto liability and the property segments increased more than 32% versus the prior year,” said Ocasek. Insureds also looked to the E&S market for “significantly” more umbrella, excess general liability, and commercial multi-peril coverage last year, he added.
While auto liability premium volume rose just 4.4% nationally, some states saw much bigger spikes – Illinois at 32.4%, Idaho at nearly 50%, Minnesota at 78.6%, Washington state at 57.4%, and North Carolina at 67.3%.
This latest report breaks out E&S premium by line of business and by state. Commercial liability and property represent the majority of the market at 39.6% and 33.3%, with property premium volume rising by nearly 32% in 2023 and commercial liability increasing by 9.9%.
After property, auto physical damage saw the largest increase in premium at 24% and commercial multi-peril (which includes package policies for inland marine, crime, boiler and machinery, auto, and farm) jumped 21%.
Professional liability lines saw the steepest drop in premium at 5.1%, although the number of transactions rose slightly, up 2.6%.
The WSIA report is based on data reported by the nation’s 15 surplus lines stamping and service offices, representing about 64% of all U.S. surplus lines premium volume. State-by-state data is available here.
WSIA noted that homeowners premiums written through E&S insurers did increase by 7.5% in 2023, but overall transactions dropped by just under 3% and the line remains a small part of the overall surplus lines market.
“Nobody who has seen the volatility in the California homeowners market will be surprised to hear that homeowners was the one line of coverage that saw large increases in both premium (20%) and transactions (26%) in 2023,” said Ben McKay, CEO and executive director of the Surplus Lines Association of California. “This was to be expected, given the decisions by numerous admitted carriers to stop writing new homeowners’ business in California.”
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