Surplus lines continue upward trend to start 2024
According to the Stamping Offices report, surplus lines premium hit $39.5B in the first half of the year.
Surplus lines premium reached $39.5 billion with 3.2 million items filed in the first half of 2024, the U.S. Surplus Lines Service and Stamping Office shared in their 2024 Midyear Report. This demonstrates increases of 10.1% and 10.8% in premium and items respectively compared to the same period in 2023.
When considering specific lines, commercial liability and commercial property coverage continued to dominate the industry. Personal lines policies remain a very small portion of the overall E&S market, with premiums for residential, homeowners and other personal property coverages comprising 4.6% of year-to-date premium in 2024.
The midyear report attributes the growth in this area to the fact that admitted insurers are withdrawing from certain markets, leaving the E&S market as a solution for those who don’t fit the standard market’s appetite.
“The significant growth in California at the start of the year is primarily driven by an influx of new policies in the real estate, personal lines/homeowners, hospitality, and wholesale industries,” Ben McKay, CEO and executive director of the Surplus Line Association of California – which saw moderate premium growth of 7% to start the year – said in a release about the report. “It’s important to note that, except for personal lines/homeowners, the premium for policies in these industries and others shows moderate to flat growth.”
Oregon’s Surplus Lines Association reported overall specialty premium in the state increased by 4.4% and transactions increased 3.4% when compared to the first half of 2023, with liability and personal lines coverage remaining stable.
Wildfire risk has been particularly influential to the specialty market in some states, including Nevada.
“Wildfire risk in Nevada has impacted the availability and affordability of personal home insurance. This has led to mid-year premium and policy growth of 31% and 19%, respectively, in residential, homeowners and other personal property coverages placed in the Nevada surplus lines market,” Maria Muzea, executive director of the Nevada Surplus Lines Association, said in the report release. “As insurance companies contend with the frequency of severe weather events, consumers may continue to seek solutions in the surplus lines market.”
Florida specialty premiums saw continued growth of 12.3% year-over-year to start 2024, with commercial property remaining the main driver of the market’s growth in the state.
The specialty market in Illinois has also grown in recent years, with premium volume reportedly doubling and transactions increasing 25%. The report states this growth was largely driven by property coverages in the first half of 2024. Other lines that have shown notable increases this year in the state include cyber, commercial general liability, E&O and commercial auto liability.
New York’s specialty market maintained a moderate amount of growth in the first half of 2024, with premiums increases 8.3% and items up 10.1%.
Stamping Offices are non-governmental entities that exist in 15 states and help oversee surplus lines transactions and evaluate eligible insurers for financial security. A collection of previous Stamping Office annual reports can be found here.