Texas surplus lines premium back on record track in August

The Surplus Lines Stamping Office of Texas has recorded $717.8mn in premium during August, 19 percent higher than the figure in the same month last year.

This pushed the state’s total for the year as of the end of August to $5.38bn - up 11.1 percent over the same period in 2019.

In 2020, each month’s recorded premium has been the highest ever reported for that month except for July, when the $723.2mn recorded was 6 percent lower than in July 2019.

The largest premium recorded by month in 2020 came in May at $772.9mn. The lowest total recorded premium came in February with $502.93mn, although SLTX noted that was still a record for that calendar month compared to previous years.

SLTX revealed that various types of surplus lines coverages have experienced growth in 2020 over 2019.

As of the end of August, contingency liability premium had increased 131.8 percent, flood by 14.0 percent, and fire and allied lines – the largest coverage – by 21.9 percent over 2019.

However, SLTX reported a 3.6 percent decrease in the number of filings year to date from the previous year. As of the end of August 2020, there had been 714,828 total filings.

As this publication has reported, the surplus lines sector is buoyant at the moment, with greatly increased submission volumes and hardening rates.

This is attracting players to the market.

For example, US specialty insurer Fortegra Financial Corporation last week announced a new excess and surplus lines subsidiary.

“We have seen rates harden in the market,” said Fortegra CEO Richard Kahlbaugh. “The catalysts for the hardening are diverse and as such we expect the trend to continue for the foreseeable future. Adding an excess and surplus lines company to our portfolio was a natural response, allowing us to broaden our product reach and scope within the US.”

Palomar also recently launched a surplus lines carrier, while Sirius is working on a new platform that it hopes will go live later this year.

Private equity-backed start-ups such as the vehicle being worked on by former Arch CEO Dinos Iordanou and scale-ups including the reboot of StarStone US led by Ed Noonan and Jeff Consolino are also aimed at the sector.