Brokers Find Calif. Surplus Lines Boom Slowing
NU Online News Service, Jan. 12, 11:08 a.m. EST?The demand for surplus lines insurance in California, which had seen the business grow by over 100 percent, increased only eight percent last year, a brokers trade group reported.[@@]
The Surplus Line Association of California said premium business exceeded $5 billion in 2004, or slightly more than 8 percent over 2003.
"In 2003, the SLA processed 43.1 percent more than in 2002. In 2002, the SLA processed 104.5 percent more than in 2001," reported Ted Pierce, executive director of the San Francisco-based SLA.
According to his organization's analysis of the annual filed premium, $5.52 billion in surplus line insurance premiums were processed in 2004.
The $5.52 billion in surplus line premium represents 441,221 insurance policies written for California insurance consumers, SLA said.
"While these figures are high, they represent a mere 8.24 percent increase over the 2003 premium total," Mr. Pierce said in a statement.
"There is clearly a slowing in the demand for increased surplus line coverage in California," he said.
The top five surplus line brokers were Swett & Crawford, Marsh USA Inc., Western Risk Specialists Inc., AON Risk Services Inc. of Southern California, and Sterling West Insurance Services Inc.
The five largest coverages written in 2004 were general liability, errors and omissions, commercial property, commercial difference in conditions/stand alone earthquake, and excess liability.
The top five California surplus line insurers were Lexington Insurance Company, American International Specialty Lines Insurance Company, Landmark American Insurance Company, Arch Specialty Insurance Company, and Scottsdale Insurance Company. The combined Lloyd's syndicates wrote 14 percent of California premiums.
The SLA is an organization of 990 surplus line brokers licensed by the state of California to negotiate and place insurance with non-admitted insurers. The SLA serves as the official surplus line advisory organization to the California Department of Insurance. With few exceptions, all California surplus line insurance policies must be filed with the SLA for analysis, regulatory compliance, record keeping and statistical reporting.
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