Mid-year Texas surplus lines premium surges 13.4% as monthly records fall

There was further evidence of the buoyant US excess and surplus lines (E&S) market this week from Texas with the state reporting that premium had jumped 13.4 percent at the half-year stage to $3.48bn.

The Surplus Lines Stamping Office of Texas (SLTX) reported that through the first half of the year, each month’s recorded premium has been the highest ever reported for that month.

The mid-year increase looks to have been a combination of increased filings reflecting the greater business flowing into the E&S sector generally, and the impact of higher prices.

The SLTX reported that total filings for the first two quarters of the year were up 4.6 percent, with 548,884 filings recorded through to the end of June 2019.

It added that on a monthly basis, June 2019 premium showed a 15.1 percent increase in premium to $692.9mn, even though actual filings decreased by 1.3 percent in the month.

Texas is a good bellwether for the E&S market as a whole because it accounts for around 20 percent, or $6.1bn of overall premium recorded by stamping offices in the US last year.

As previously reported, there is anecdotal evidence from wholesalers of submission levels reaching record levels across the E&S market across all lines of business in the first half of 2019.

At the same time, E&S property and many casualty segments have seen an acceleration of hardening.

The phenomenon is being driven by the high-profile retrenchment of a number of carriers led by AIG and Lloyd’s in multiple classes of business across US commercial insurance business.

That has led to an increasing incidence of retail brokers seeking E&S capacity through their wholesale relationships to fill gaps in programmes when standard lines capacity is no longer available.

The SLTX also compiles data analyzing other markets across the US.

Its data for 2018 showed that premium climbed for the E&S domestic market by 11.3 percent to $31.4bn last year.