Surplus lines hit records for premiums, transactions in 2021

Data shows double-digital premium growth from each state stamping office.

Illinois saw the highest premium growth at more than 40%, according to the Wholesale & Specialty Insurance Association. Other states seeing premium growth above 25% were Arizona (37.7%), Florida (25.92%), Nevada (25.69%), New York (25.83%), North Carolina (34.7%) and Oregon (26.93%), according to data from U.S. stamping offices. (Credit: wei/stock.adobe.com)

U.S. surplus lines reached new records in terms of premium levels and transactions in 2021, according to the Wholesale & Specialty Insurance Association (WSIA). Data from U.S. stamping offices showed premiums increased 22%, reaching $51 billion. Transactional totaled 5.3 million, representing a year-on-year increase of nearly 7%.

“The data is quite telling and confirms what many industry leaders have been saying for the last two years,” Dan Maher, executive director of the Excess Line Association of New York, said in a release. “Premiums on renewals have increased substantially and at the same time the admitted market has retrenched in several areas, which is causing business to shift to the E&S market. The shift is across numerous lines of business from property with CAT loss exposures to liability risks such as excess, umbrella, D&O and cyber where social inflation and new exposures are of serious concern.

Maher added new capacity is coming into the E&S market, which should work to moderate and stabilize prices as it is deployed throughout the year.

Double-digit premium growth seen across country

Every state reported double-digit premium increases, with Illinois seeing the biggest gain at more than 40% according to WSIA.

“Our numbers were incredibly strong, especially in the third and fourth quarters,” David Ocasek, CEO of the Surplus Line Association of Illinois, said in a release. “General and excess liability categories, including commercial general liability, cyber, pollution, products and employment practices liability, led the way with a 60% increase versus prior year. Property, including all risk, increased 23%.”

Other states seeing premium growth above 25% were Arizona (37.7%), Florida (25.92%), Nevada (25.69%), New York (25.83%), North Carolina (34.7%) and Oregon (26.93%), according to data from U.S. stamping offices.

“We saw greater than 100% increases in premium on classes of business such as cyber liability, excess personal liability and miscellaneous liability,” Geoff Allen, COO of the North Carolina Surplus Lines Association, said in a release. “The largest increase in the number of transactions filed for a class of business in 2021 was primary residential flood insurance.”

In the country’s largest surplus lines market, California, premiums increased 18%, while transactions were up 7%, according to WSIA.

David Kodama, executive vice president of The Surplus Line Association of California, noted significant increases in item count and average premium were seen across coverage types, with cyber, property and commercial auto standing out.

“This growth coincides with reported increased activity in data breaches, ransomware attacks, wildfires, increased auto loss severity and emerging social and cost inflation,” Kodama said in a release.

Despite not keeping up with premium growth, transactions increases above totals seen in 2020 were recorded in every state, WSIA reported.

Related: