The world of insurance constantly changes, and it will continue its dynamic course of developing and responding to risk. The conventional wisdom and practices that affect behaviors and cultures in agencies, brokerage firms, and insurance and reinsurance companies continually give way, as we challenge what worked yesterday and try to improve upon it for today and tomorrow.

The surplus-lines market has witnessed rapid growth and development, in accordance with opportunities for its underwriting expertise and discipline to address market needs. In 1981, $2.2 billion of direct written premium was placed in the E&S market. As confidence in the stability of that market and policyholders' needs continued to grow, the surplus-lines industry responded. Today, it is responsible for more than $34 billion in direct written premium, according to the A.M. Best Special Report on the Excess and Surplus Lines Market. This accounts for approximately 15% of the direct premium written in the entire property and casualty market, compared with approximately 3% in 1981.

To place the importance of this in context, one must also look at the quality of the business being underwritten. According to the A.M Best report, the combined ratio of the surplus-lines composite market continues to outperform that of the admitted market. The market's strong performance is further evidenced by the surplus-lines composite's better-than-average pretax returns on net premium earned. The market also boasts balance sheets strengthened through operating profitability brought about by the recent hard market, entrepreneurial accountability for results, and a relentless commitment to professional development and underwriting discipline.