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Best’s Market Segment Report: Record-High Direct Premiums Written for the U.S. Surplus Lines Segment in 2021

  • September 06, 2022 10:00 AM (EDT)
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Oldwick //BestWire// - Total U.S. surplus lines direct premiums written (DPW) reached a record $82.6 billion in 2021, with momentum continuing through mid-year 2022, according to a new AM Best report.

The Best’s Market Segment Report, titled, “Record-High Direct Premiums Written for the U.S. Surplus Lines Segment in 2021,” states that the U.S. surplus lines companies reported vastly improved underwriting and operating results, and notched their largest year-over-year premium growth since 2003.

The report notes that in the first quarter of 2020 through mid-2022, U.S. property/casualty (P/C) companies and their distribution partners have dealt with myriad of challenges, including the wide-ranging effects of a pandemic, a supply chain crisis and rising inflation, while withstanding above average losses from natural catastrophes and substantial investment market volatility. As a result, loss costs continue to rise and price adequacy remains a serious concern for several lines of coverage.

Despite these challenges, the P/C industry has been able to limit underwriting losses and generate surplus growth. In particular, non-admitted or surplus lines companies have been able to generate net underwriting and operating gains. The surplus lines insurers’ market share of total P/C DPW has more than doubled over the last 20 years, to 10.1% at the end of 2021, up from 4.3% in 2001. The surplus lines insurers’ share of the commercial lines’ DPW grew to 20.4% at the end of 2021, from 8.3% at the end of 2001, further demonstrating the segment’s resilience in seemingly adverse market conditions.

AM Best expects surplus lines insurers will continue to benefit from underwriting results, organic capital generation and intelligent management of balance sheet factors, as they have throughout the pandemic. Volatility in the investment markets, however, could constrain overall operating earnings.

Overall, AM Best believes that, given the surplus lines market’s proven ability to effectively assess new exposures and its flexibility to tailor terms and limits to meet coverage demands, the market’s critical role and value to the P/C insurance marketplace will continue to grow.

To access the full copy of this market segment report, please visit .

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

Commercial Lines Press Release A.M. Best Rating Services, Inc. Insurance Surplus Lines

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