Wholesale insurance market favorable outlook continues

Fitch Ratings forecasts a strong growth trajectory for U.S. E&S insurers.

“Premium growth was driven by property insurance lines and, to a lesser degree, liability insurance lines. The single exception was the other liability (claims made) line of business which actually shrunk. Over the past few years before 2023, E&S premium growth had been more consistently strong across all major product lines,” Fitch Ratings reports. (Credit: HN Works/Adobe Stock)

Excess and surplus (E&S) insurers in the U.S. experienced double-digit growth in direct premiums written for the sixth straight year, Fitch Ratings reports.

This insurance market’s direct written premiums grew by 15% in 2023, double the 7% increase for the country’s property and casualty insurers overall. This represented the 13th consecutive year of premium growth, and the sixth straight year in which the market saw double-digit premium growth).

Fitch says this current growth spurt began in earnest in 2018. E&S lines now make up 9% of the total P&C insurance industry.

Fitch Senior Director Doug Pawlowski said in a statement that there are an array of influences driving the trend. Among them: “admitted markets shedding unprofitable, volatile business, the high cost of reinsurance, and adverse loss cost trends due to persistent inflation.”

Premium growth was driven by property insurance lines and, to a lesser degree, liability insurance lines. However, Pawlowski added, premium growth in property lines from catastrophe-prone states remains problematic.

“Premium growth will continue to come from a combination of higher price and greater policy volume, though it will be less broad-based across lines of business,” Pawlowski said.

See also:

Recommended Stories