Surplus lines premiums exceeded $31 billion, and premium bearing transactions neared 2.8 million in the first six months of the year, according to the 2022 mid-year report of the US Surplus Line Service and Stamping Offices.
Premium increased 32.4% compared to the same period last year, transactions were also up 9.4% in the first half of 2021.
According to the report, year-to-tear premium grew at the highest percentage rate since 2009, when the stamping offices started reporting on the data.
The increase in premium bearing transactions has also been the highest percentage growth since 2017, the report highlighted.
Stamping offices usually report higher premiums in quarters three and four than in quarters one and two, the Wholesale & Specialty Insurance Association (WSIA) explained.
Most of them predict that dynamic economic factors will drive continued growth in the market for the rest of the year.
The report “clearly demonstrates” the continued strength and stability of the surplus lines market, despite inflation and hardening markets.
Dan Maher, Executive Director of the Excess Line Association of New York commented: “The report confirms a continuing hard market, and the New York numbers closely track the averages across the 15 states.
“While an unprecedented level of startup carriers have entered the E&S market it has not yet resulted in insignificant downward pressure on rates.”
According to Maher, the rate of return on bonds and treasuries has improved somewhat, but inflation, social inflation, property catastrophic risk exposures, including war and other risk exposures arising out of Russia’s attack on Ukraine, are all “counterweights to aggressive underwriting.”
Some states, like Texas, Florida and Nevara, reported record-setting numbers during the first two quarters of 2022.
Greg Brandon, Executive Director, Surplus Lines Stamping Office of Texas said, “Premium reported in April exceeded the $1 billion milestone, a first for the State of Texas market. May and June have also exceeded the threshold.”
Maria Muzea, Executive Director, Nevada Surplus Lines Association said: “Nevada’s largest increases were in construction, property and professional liability.
“This indicates that increasing prices for construction materials, and inflation generally, is likely driving at least some premium growth.”
Mark Shealy, Chief Financial Officer, Florida Surplus Lines Service Office, attributed Florida’s
growth to general insurance market conditions.
He said: “These upswings are due to a reduction in capacity in the admitted markets causing both a hardening of pricing and an increase in transactions with the E&S marketspace.”
