Continued Growth for Surplus Lines in 2023 as Premiums Up 14.6%

The excess and surplus lines market continued to grow in 2023, with premium reaching nearly $73 billion according to data from 15 state surplus lines offices released by the Wholesale & Specialty Insurance Association (WSIA).

2023 premiums reflected a 14.6% increase over the record-breaking numbers of 2022 when premiums grew more than 24% to $63 billion.

Transactions were up 5.2% to 5.8 million in 2023, led commercial liability and commercial property making up the bulk of the market. Premiums in these lines increased nearly 10% and 32% to about $26.8 billion and $24.2 billion, respectively, in 2023.

Combined, E&S premiums for personal property grew 7.5% in 2023 to about $3 billion but transactions decreased 2.7%. However, the report breaks down data by state, revealing where risk is flowing to the E&S market. For instance, personal property transactions increased the most (26.3%) in California and premiums grew more than 20% to nearly $746 million (though personal property is still just 4.5% of the E&S market in California).

“This was to be expected, given the decisions by numerous admitted carriers to stop writing new homeowners business in California,” said Ben McKay, CEO and executive director of the Surplus Lines Association of California.

The largest premium market share of E&S personal property belongs to Florida at nearly 9% but personal property transactions decreased 7.6% in 2023. Overall E&S premiums in Florida grew 27.8% in 2023 to $15.4 billion.

“We continue to see the commercial property market’s premiums exhibit a noteworthy surge in response to current market conditions,” said Mark Shealy, executive director of the Florida Surplus Lines Service Office. Commercial property premiums increased 41.7% to about $7.2 billion to now account for 46.5% of the market.

In another large surplus lines state, premiums grew 25.8% in Texas to about $14.6 billion – led by 45.9% growth in commercial property.

Janet Pane, executive director of the Excess Line Association of New York, said premium increases in 2023 were primarily driven by commercial liability and property, excess liability and umbrella, errors and omissions, and directors and officers. Overall E&S premiums grew 5.2% to about $8.1 billion in New York, and transactions were up 8.6%.