E&S premiums up 28% in 2003: A.M. Best

The U.S. excess & surplus (E&S) lines industry saw direct premiums rise 28% in 2003, compared to just 12% growth in the overall property & casualty industry, according to a new report by A.M. Best.E&S writers saw premiums jump 62% in 2002, and then followed this up with substantial growth last year, capitalizing on hard market rates over the past three years as well as the “migration” of business from standard markets to surplus lines.This growth follows historical trends. “During the onset of any hard market, growth in the surplus lines market generally has dwarfed premium growth in the overall p&c market,” A.M. Best notes.There still remains significant opportunity for E&S carriers to increase rates further, the rating agency says, despite signs of softening toward the end of 2003 and early 2004. Property, umbrella and excess coverage lines are feeling the brunt of this price pressure.Large carriers have benefited most from recent pricing trends and the flight to quality, with the top 25 writers holding 85% marketshare. AIG accounts for 24.4% of the market alone, while Lloyd’s holds 13.7% of the market.Successful carriers will be those who offer value-added services such as risk and claims management, Best speculates. “Proficient insurers also will leverage technology and employ data mining to target and retain their customers with superior service.”