OLDWICK, N.J. — Following years of consistent and substantial growth, the flow of business from admitted insurance carriers into the U.S. excess and surplus (E&S) lines market has shown signs of tapering off, according to a new AM Best report.
Premium growth in the E&S market increased by 9.7% through the third quarter of 2025, compared with 13.5% for the same prior year period. Although market premiums have been affected by increasing levels of competition for certain risk classes and lines of coverage, surplus lines insurers have continued a multiyear surge, absorbing complex risks that admitted carriers have increasingly eschewed in property, commercial auto and high hazard casualty lines.
This lower growth also reflects competitive market pressures within certain lines of insurance coverage such as commercial property, cyber, and directors and officers (D&O) liability. Despite the lesser pace of growth in 2025, the surplus lines market continues to evolve and positioned to handle a greater number of risk in specific classes that are better suited for E&S.
“These changes have influenced both distribution and product strategies,” said David Blades, associate director, AM Best. “One such example is capacity for catastrophe-exposed property coverage, an area in which surplus lines carriers have been able to offer flexibility and customization for those kinds of risks that no longer fit standard underwriting frameworks.”
According to the report, most accounts that have transitioned to the E&S market are underwritten in a manner reflecting the exposures presented, with customized policy conditions and rates commensurate with the risk, which exemplifies the core competencies of surplus lines carriers. However, some E&S market premium growth in recent years has been driven by newer market entrants, including fronting companies that are explicitly striving to grow their market share in the surplus lines and specialty commercial markets.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=361953.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
