Surplus Lines

The surplus lines market, a group of highly specialized insurers exists to provide coverage that is not available through licensed insurers in the standard insurance market. Each state has surplus lines regulations and each surplus lines company is overseen for solvency by its home state. The role of surplus lines in the commercial market has increased over the years. In 2011, surplus lines accounted for 14.6 percent of the U.S. commercial lines market, up from 9.5 percent in 2001 and 5.2 percent in 1991, according to a September, 2012 A.M. Best report.

 

GROSS SURPLUS LINES PREMIUMS WRITTEN, 2008-2012

($ billions)

Source: 2010 to 2012 premiums from Business Insurance, September 23, 2013; earlier premiums from other issues.

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  • Surplus lines gross premiums written fell 1.0 percent in 2012, after falling 2.4 percent the previous year.
  • At $9.23 billion in 2012, premiums for the top ten surplus lines insurers fell 12.2 percent from 2011 and were down 28.8 percent from 2008.
  • In 2012, surplus lines accounted for 13.4 percent of the U.S. commercial lines market, up from 11.1 percent a decade earlier, according to a September, 2013 A.M. Best report.

 

TOP TEN U.S.-BASED SURPLUS LINES INSURANCE COMPANIES BY NONADMITTED DIRECT PREMIUMS WRITTEN, 2012

Rank Company Parent Nonadmitted direct written premiums
1 Lexington Insurance Co. American International Group lnc. $4,285,026,291
2 Scottsdale Insurance Co. Nationwide Mutual Insurance Co. 1,253,440,156
3 Steadfast Insurance Co. Zurich Insurance Group Ltd. 1,058,976,202
4 Chartis Specialty Insurance Co. American International Group lnc. 809,392,168
5 Columbia Casualty Co. CNA Financial Corp. 782,097,439
6 Landmark American Insurance Co. Alleghany Corp. 589,564,231
7 Nautilus Insurance Co. W.R. Berkley Corp. 489,902,728
8 Westchester Surplus Lines Insurance Co. Ace Ltd. 454,599,457
9 Arch Specialty Insurance Co. Arch Capital Group Ltd. 448,902,049 (1)
10 Illinois Union Insurance Co. Ace Ltd. 448,009,429 (1)

(1) Company statement filed with the National Association of Insurance Commissioners.

Source: Business Insurance, September 23, 2012.

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