Texas surplus lines premium surges 16% in first nine months
The Surplus Lines Stamping Office of Texas (SLTX) has recorded $5.35bn in surplus lines premium in the state through the first three quarters of 2019 – a 16.2 percent increase over the same period in 2018.
The office noted that each month’s recorded premium this year has been the highest ever recorded for that particular month.
The largest premium recorded by month so far in 2019 was in July at $768.2mn, followed by June with $692.9mn. The month with the lowest total recorded premium this year was February with $410.1mn.
SLTX recorded 836,043 policy filings in the first nine months, a 5.3 percent increase over filings in the same period of 2018. It has also seen a 28.3 percent increase in the number of policies filed for exempt commercial purchasers, with 1,873 policies in the first three quarters of 2019 compared with 1,460 in 2018.
The office reported growth for many different types of surplus lines coverage. Cyber liability premium increased 36.8 percent in the first nine months over the same period last year, while flood grew by 29.5 percent. Fire and allied lines, the largest coverage code, jumped 23.7 percent.
The cyber growth follows SLTX recently reporting an increase in surplus lines cyber liability coverage from 3,935 policies and approximately $78mn in cyber premium in 2017 to 5,008 policies with premiums totalling roughly $90mn in 2018. SLTX late last month reported that 4,090 cyber liability policies had been filed this year with nearly $83mn in premiums.
The rate of increase has also picked up over the third quarter. At the half way stage of the year, Texas surplus lines premiums were up 13.4 percent to $3.48bn.
The overall US surplus lines market has been enjoying impressive growth this year. Ratings agency Fitch recently reported E&S lines market direct premiums increased 15 percent in the first half of this year, up on the 11 growth in 2018.
At the WSIA annual marketplace in San Diego last week, wholesale brokers were talking about record levels of news business as submissions flood into the marketplace.
As previously reported, the surge in business into the E&S market comes as admitted carriers retrench.
Premium growth is being fueled by increased submissions and hardening across broad swathes of the market as E&S carriers also take a more risk aware approach to underwriting.
AIG’s Lexington has been leading the way with shortened limits, higher deductibles and a push for rate increases, while the impact of reduced appetite from Lloyd’s has also had a telling impact on the segment.