The Top Writers of Excess & Surplus Lines Insurance In Massachusetts

A look at the largest Surplus Lines writers in the Commonwealth

In putting together our latest top writers list on the Surplus Lines marketplace, we came across this introduction from the Wholesale & Specialty Insurance Association, formed in 2017 from two former associations.

Agency Checklists thought the first two paragraphs presented the perfect answer to “What is Surplus lines?”

Here is what they said:

Often called the “safety valve” of the insurance industry, surplus lines insurers fill the need for coverage in the marketplace by insuring those risks that are declined by the standard underwriting and pricing processes of admitted insurance carriers. With the ability to accommodate a wide variety of risks, the wholesale, specialty and surplus lines market acts as an effective supplement to the admitted market. According to A.M. Best, 2016 surplus lines premium volume was nearly $42.4 billion and represents a vast number of insureds who, without the surplus lines market, would have a difficult time obtaining insurance, if they were able to secure it at all.

The surplus lines market plays an important role in providing insurance for hard-to-place, unique or high capacity (i.e., high limit) risks. Surplus lines insurers are able to cover unique and hard-to-place risks because, as nonadmitted insurers, they can react to market changes and accommodate the unique needs of insureds who are unable to obtain coverage from admitted carriers. This results in cost-effective solutions for consumers that are not “one size fits all,” but are skillfully tailored to meet specific needs for non-standard risks.

Turning to the Surplus lines market here in Massachusetts, there are currently 104 companies that writer Surplus lines insurance in Massachusetts with a combined total of Direct Premium Written of $658,065,611.

As we have mentioned before, all of our data comes courtesy of the Division of Insurance and features the largest writers as of 2016, the latest year for which complete data is available.

A look at the Top 20 Surplus Lines insurers…

A review of the top 20 Surplus Lines insurers reveals that these companies had a 64.8% share of the marketplace in 2014, with a combined Direct Premium Written total of $426,619,379 dollars equaling a 64.8% market share.

As for the remaining 84 insurers writing Surplus lines insurance here, they have a 35.2% share of the market with a combined Direct Premium Written total of $231,446,232.

Not one of the top 20 insurers are based in Massachusetts

Surprisingly, none of the Surplus Lines insurance companies are based in Massachusetts. While Lexington Insurance company is technically based here, the AIG subsidiary is officially domiciled in Delaware. In fact, seven out of the top 20 Surplus lines insurers are officially domiciled in Delaware. As for other New England states, only two other insurers are domiciled here in New England. Western World Ins. Co. and Liberty Surplus Ins. Corp. both are domiciled in New Hampshire.

The List…