As reported in the Insurance Journal, the surplus lines industry is expanding at an approximately 13% faster rate than it was during this time in 2018. Stamping offices are indicating that premium has already hit $18 billion, a 12.7% growth over mid-year 2018 reports. All surplus lines service office states except for Nevada have reported a growth in premiums generated by the surplus lines market. Some of the major coverages that are being increasingly written in the surplus lines space and are contributing to this growth are construction, professional and general liability coverages.
Another contributor to the increase in surplus lines premiums generated in 2019 has been an across-the-board increase in rates by many surplus lines carriers that have operated in a stagnated economy over the last decade and are now responding to stronger financial industry and economy metrics. We are also seeing rate increases in connection with certain property coverages due to changing weather patterns and hurricane risks, along with the emergence of “parametric” surplus lines policies triggered by certain weather events.
We expect to continue to see a rise in premiums generated through the surplus lines industry not only because the U.S. economy continues to rebound in the aftermath of the “Great Recession”, but also due to the emergence of “InsurTech” products and distribution methods that more efficiently place insurance coverage in the hands of consumers while also developing new, novel insurance products to help protect against emerging risks in a technology-driven environment.