Domestic surplus lines writers saw a small increase in direct premiums written in 2011, breaking a four year decline, and the overall surplus lines industry reported a 1.8% decrease in direct written premiums, the fifth consecutive annual decline, according to A.M. Best’s 2012 Special Report, U.S. Surplus Lines – Market Review.
The report, produced by the A.M. Best Company with a grant from the Derek Hughes/NAPSLO Educational Foundation, represents the 19th annual study of the surplus lines industry.
“We are pleased to continue our support to A.M. Best in producing the annual special report,” said Joseph Timmons, President of the Derek Hughes/NAPSLO Educational Foundation. “The report has become the authoritative study of the industry, demonstrating the stability of the excess and surplus lines sector.”
The report noted domestic professional writers saw a 3.2% increase to $22.6 billion in direct premiums written in 2011. Lloyd’s remained virtually unchanged at $5.8 billion, regulated aliens reported a 32.5% decrease to $2.5 billion and domestic specialty, companies saw a 19.5% decline, to $231 million.
For the eighth year in a row, the surplus lines industry reported no financially impaired companies noting a marked contrast to the admitted property/casualty industry’s 34 disclosed financial impairments for the year.
The report indicates surplus lines insurers continue to demonstrate resiliency by remaining very well capitalized despite significant market challenges and unprecedented natural catastrophe events in 2011. The report continues to provide A.M. Best’s perspective on the state of the market and the relative positions of carriers in the market, and it examines the surplus lines sector’s financial condition and ratings distribution, market trends, regulatory and legislative developments, distribution issues, and impairment trends.
A panel of industry leaders, including NAPSLO President and Foundation Director Robert Sargent, Foundation Director Maureen Caviston, Lexington Insurance Company President David Bresnahan, and NAPSLO Executive Director and Foundation Director Brady Kelley, reviewed the report’s results as part of an A.M. Best produced, and Lexington sponsored, webinar on Monday, September 24. A copy of the webinar can be viewed at http://www.bestreview.com/webinars/surplus12.
A copy of the report was recently emailed to NAPSLO members, and copies will be available at NAPSLO’s 2012 Annual Convention. Members can either download the report from NAPSLO website or request an electronic copy by emailing email@example.com.