Total surplus lines in US direct written premiums (DPW) increased 19.2% to reach a record $98.5 billion in 2022, marking five consecutive years of double-digit increases in growth rate, according to a new AM Bestreport.
The new Market Segment Report at Best“Surplus Lines Insurers Focus on Evolving Risks to Sustain Premium Growth,” shows eight of the top 10 lines of coverage segment DPW will grow by more than 10% by 2022, led by commercial property, commercial auto, and general liability lines, with the latter including the expansion of umbrella and excess liability, cyber, and professional liability segments.
Pricing pressures have continued for many commercial lines of coverage over the past two years, with both unclaimed and acquired companies focusing on core business and cutting what they consider low-cost, borderlines. which are excess line accounts from their portfolios. These factors will help push the excess line share of P/C commercial DPW above 20% for the first time in 2021, ending 2022 at 21.6%.
Many weather-related catastrophic losses, property risks, and increased total claims due to high construction costs have made the underwriters of the excess line carve out a larger portion of the total premiums in the property/casualty (P/C) industry, which increased across the board. -time high of 11.2% in 2022, up from 10.4% last year.
- The three states that generate the most surplus premium lines annually are among those showing double-digit growth: California, up 22.2%; Texas, up 27.3%; and Florida, increased by 26.5%.
- New York, the fourth highest state by annual premium line surplus, rose 21.2%, the second consecutive year of more than 20% growth after growth of only 3.9% in 2020 .
- The largest growth was seen in Nevada (41.8%), Minnesota (38.4%) and Arizona (29%).
However, the growth figures in the middle of the year 2023 from the 15 stamping offices that manage transactions in the surplus and surplus, or not accepted, market are lower than year-on-year from 2022.
- Surplus lines increased 15.9% year-over-year mid-year 2023 from mid-year 2022, compared to an increase of 32.4% in mid-year 2021 to 2022 figures.
- While four out of 15 stamping offices reported double-digit increases by mid-2023, by mid-2022, 13 out of 15 offices reported double-digit year-over-year increases. .
- Surplus lines of DPW growth reached a high of 25% in 2021.
The report also noted that the demand for cyber coverage is driving the increase in premium growth – 57.4% is now given to excess line writers from 24.5% in 2020.
“In our view, the surplus and excess line segment should continue to report favorable underwriting results and organic capital formation,” said Robert Raber, director, AM Best. “Fluctuations in the investment markets can depress overall operating income, but surplus and excess lines insurers usually do well during cycles when market conditions favor standard insurers. in the market.”
New distribution platforms and partnerships with geographic or product line diversification also play a key role in allowing multi-line groups to protect their market positions and boost growth. of the new entities in the surplus line.
Excess Surplus AM Best
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