SLSOT Sees Slowing of Surplus Lines Rate Increases
The Surplus Lines Stamping Office of Texas was established in 1988 as a result of legislation drafted by a committee that included Texas Surplus Lines Association members, Texas Department of Insurance staff and other insurance industry professionals, and passed by the 70th Texas Legislature in 1987. SLSOT’s main responsibilities, as delineated on its Web site, include: “evaluation of surplus lines insurers for eligibility to write in Texas; review of all surplus lines insurance policies procured by Texas licensed surplus lines agents; and education.”
As such, it regularly reports on the state of the surplus lines industry in Texas as indicated by premium dollars reported to SLSOT by companies registered to operate in the state. A recent edition of SLSOT’s quarterly newsletter, “Lone Star Lines,” included an analysis and comparison of numbers for 2003 and previous years.
In his analysis of the 2003 data, Phil Ballinger, SLSOT’s general manager, noted that per-policy premium increases appear to have slowed significantly last year. Overall, the average per-policy increase in 2003 was 1.4 percent, while increases in 2001 and 2002 averaged 30-plus percent. Rate increases fell dramatically in medical malpractice and homeowners lines, both of which had seen tremendous rate hikes in 2002. The per-policy increase for med-mal dropped by more than 31 percent in 2003 from the previous year, and the homeowners line saw a decrease of 22 percent in average per-policy premium as compared to 2002.
At the end of 2002, with more than $2.5 billion in premium, Texas ranked second in the nation in total surplus lines premium, following California and just ahead of Florida. As indicated in the table below comparing 5-years of SLSOT premium—1999 through 2003—the total premium for surplus lines in Texas for 2003 was nearly triple that of the state’s 1999 total. The largest increases in total premium occurred between 2001 and 2003, concurrent with the hardening of the property and casualty insurance market nationwide.
Liability and property lines were responsible for a large chunk of Texas’ premium, representing more than 85 percent of the market in 2003. The average premium per policy in 2003 was $5,915. Underwriters at Lloyd’s held the top spot among Texas surplus lines insurance groups ranked according to total premium. It wrote just under $442 million in premium in Texas in 2003.
The following charts and tables represent premium and market share statistics for Texas surplus lines companies. The data was prepared and presented by the SLSOT,
and appeared as an insert in “Lone Star Lines,” vol. 10, January – March 2004.
The information is reprinted here with permission.
Top 2003 Surplus Lines and Insurance Groups in Texas
Items Processed and Average Premium Per Policy (Click Image to Surplus Lines and Items Processed Charts).
Note: The source for all data is the Surplus
Lines Stamping Office of Texas unless otherwise stated. More surplus lines information can be found on SLSOT’s Web site at www.slsot.org, along with the latest edition of “Lone Star Lines.”