A combination of excess capital, much of it from non-traditional sources, and, to a lesser extent, the ability to put data and analytics to better use means the E&S industry can absorb larger losses than ever before.
Given the number of new entrants armed with so much capital trying to get a return for their investors, a competitive market has taken root that would require a major catastrophic loss event to alter the current playing field.
E&S market rankings show how competitive this line has become. When ranked by company, AIG's Lexington Insurance Co. saw a decrease in both direct premium wirtten (by about $220 million from 2013) and market share (by 1.2 percentage points), but still retains the No. 1 position. Nationwide's Scottsdale Insurance Co. increased its DPW by about $100 million from 2013, but holds the same market share as it did in 2013. Zurich's Steadfast Insurance Co. held steady and saw a modest increase of about $10 million in 2014, while AIG Specialty Insurance Co. took close to a $190 million hit and lost 0.7 percentage points in market share. Ironshore moves up two spots from 2013 to take the No. 5 ranking this year, with an increase of about $150 million in DPW.
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Next page: Top 25 groups in E&S
Lloyd's retained its position as the No. 1 group in E&S direct premium written. The firm increased its share 1.5 percentage points and from 2013′s $7.099 billion in direct premiums written. Showing the market's increased capacity, AIG retained its hold on the No. 2 spot, increasing its share by 1.2 percentage points, but it actually wrote just $200 million more in 2014. Spots 3-7 remain unchanged from 2013. Ironshore increased its share by 0.2 percentage points, which moved the company 4 spots up in rankings. Berkshire Hathaway also posted gains, from a 1.5% share and about $565 million in direct premium written in 2013. Fairfax Financial slid two places, down from the No. 8 position in 2013 when it wrote about $837 million. Dropping out of the top 10 are CNA Insurance Cos. and QBE Americas Group.
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