Texas surplus lines premium up 20% in Q1

The Surplus Lines Stamping Office of Texas (SLTX) recorded $2bn in premium for the first quarter, up 20 percent over the same period of 2020, with the office recording the largest monthly premium in its history in March.

SLTX recorded $877.5mn in premium for March, up 41 percent compared with the same month in 2020.

“March premium is the largest single month ever reported in SLTX’s 33-year history, exceeding the $772.8mn record set in May 2020 by more than $100mn!” the office noted.

The March 2021 figure likely benefited from delays in filing in February as a result of Winter Storm Uri hitting Texas hard.

SLTX had recorded a 14 percent increase in premium in January compared with the same period of 2020, but February’s premium was up only 1 percent.

The office reported that March’s increase was not specifically related to any new insurers or new trends in coverages.

“The increase is primarily attributed to the top five or six insurers and brokers and it continues to reflect the current hard market conditions,” it said.

SLTX’s data analysis noted that at least 8 percent of the total premium can be attributed to renewals that were historically reported in later months. The office also identified fewer cancellations and reversals reported compared with the same period in 2020.

“We also assume that any transactions which were not filed during the state-wide power outage in February would have been filed in March, although the exact impact (premium or items) is difficult to quantify considering the 60-day timely filing requirement,” SLTX said.

The overall number of transactions filed in March 2021 was up 6 percent over the same period in 2020 to 98,681. However, in the first quarter of the year the number of transactions was down 4.8 percent.

The number of policies filed in March was up 3 percent to 64,944, but this figure for the first quarter was down 7.4 percent.

“Moving forward, there are no indications that the Texas surplus lines premiums will continue this significant upward trend,” SLTX commented.

The 20 percent growth in Texas Q1 premium shows the continued boom in the US and excess and surplus lines market, which has seen rapid price hardening as well as attracted several new entrants.

Surplus lines premium in Texas increased by 14 percent in the whole of 2020 to $7.92bn, the second highest figure recorded by a state, behind California.

The premium recorded by the 15 surplus lines stamping offices in the US was up 15 percent in 2020 to $41.7bn. These offices account for over 60 percent of total US surplus lines premium volume.