A Firm Foundation: How Insurance Supports the Economy

The surplus lines market, a group of highly specialized insurers that includes Lloyd’s of London, exists to assume risks that licensed companies decline to insure or will only insure at a very high price, with many exclusions or with a very high deductible. To be eligible to seek coverage in the surplus lines market, a diligent effort must have been made to place insurance with an admitted company, usually defined by a certain number of declinations, or rejections, by licensed insurers, typically three to five. Many states provide an export list of risks that can be insured in the surplus lines market. This obviates the diligent search requirement.

The terms applied to the surplus lines market—nonadmitted, unlicensed and unauthorized—do not mean that surplus lines companies are barred from selling insurance in a state or are unregulated. They are just less regulated. Each state has surplus lines regulations, and each surplus lines company is overseen for solvency by its home state. More than half of all states maintain a list of eligible surplus lines companies, and some maintain a list of those that are not eligible to do business in that state.

Top 25 U.S. Surplus Lines Groups By Direct Premiums Written, 2022

($000)

Rank Group Direct premiums written Percent of total
U.S. surplus lines market
  Lloyd's Market (1) $15,482,880 15.7%
1 Berkshire Hathaway Insurance Group 6,903,760 7.0
2 American International Group 4,536,819 4.6
3 Markel Corporation Group 3,835,872 3.9
4 Fairfax Financial (USA) Group 3,783,062 3.8
5 W. R. Berkley Insurance Group 3,213,665 3.3
6 Nationwide Group 2,785,549 2.8
7 Chubb INA Group 2,780,635 2.8
8 Liberty Mutual Insurance Companies 2,254,098 2.3
9 XL Reinsurance America Group 2,030,901 2.1
10 Sompo Holdings U.S. Group 1,823,881 1.9
11 Starr International Group 1,821,426 1.8
12 AXIS U.S. Operations 1,577,992 1.6
13 Tokio Marine U.S. PC Group 1,500,711 1.5
14 Zurich Insurance U.S. PC Group 1,343,725 1.4
15 Arch Insurance Group 1,338,455 1.4
16 CNA Insurance Companies 1,250,983 1.3
17 QBE North America Insurance Group 1,227,653 1.2
18 Everest Re U.S. Group 1,175,218 1.2
19 Trisura US Insurance Group 1,172,170 1.2
20 Munich-American Companies 1,126,378 1.1
21 Kinsale Insurance Co. 1,102,092 1.1
22 Great American P&C Insurance Group 1,082,312 1.1
23 Hartford Insurance Group 1,039,714 1.1
24 James River Group 971,335 1.0
25 Travelers Group  968,761 1.0
  Total, top 25 $52,647,167 53.5%
  Total, top 25 and Lloyd's $68,130,047 69.2%
  Total U.S. surplus lines market $98,487,878 100.0%

(1) Because Lloyd's Market company structure differs from traditional insurance companies, AM Best does not include it in the ranking in this chart.

Source: ©AM Best – used with permission.

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