FROM 2001 through 2003, the excess and surplus lines marketplace enjoyed a remarkable run. As standard insurers curbed their underwriting in the hard market, direct written premiums in the E&S segment increased by 35.66% in 2001, by 61.67% in 2002 and by 28.3% in 2003, according to A.M. Best.
Since then, however, growth has stalled. According to an A.M. Best report released last September for the National Association of Professional Surplus Lines Offices, the E&S marketplace grew by just 0.65% in 2004. That was the lowest rate since 1996, when E&S premiums actually fell by 0.4%.
It will be interesting to see the numbers for 2005. While it's unlikely that premiums grew much in the first half of the year, it's hard to predict just how last fall's unprecedented hurricane season affected, and will continue to affect, the balance of business between E&S and standard insurers.
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