E&S Premium Growth Slows in the First Three Quarters of 2025

The U.S. excess and surplus (E&S) lines market is experiencing a slowdown in growth, with premium increases through September 2025 falling short of the previous year’s figures. This trend marks a notable shift in a sector that has enjoyed consistent expansion over the years.

According to a recent report from AM Best, a prominent insurance industry rating agency, while the E&S market continues to show growth, it is “showing signs of tapering off.” Specifically, premium growth in the E&S market rose by 9.7% through the third quarter of 2025. This is a significant decrease compared to the 13.5% growth observed during the same period the previous year. The decline can be attributed to competitive market pressures affecting specific lines of coverage, including cyber insurance, commercial property, and directors and officers liability.

AM Best anticipates that surplus line market premiums will stabilize in the near term. However, the market is expected to manage an increasing number of risks that are better suited for E&S coverage. “These changes have influenced both distribution and product strategies,” noted David Blades, associate director at AM Best. He highlighted that one area of focus is capacity for catastrophe-exposed property coverage. Surplus lines carriers have been able to provide flexibility and customization for risks that no longer align with standard underwriting frameworks.

In recent years, the growth of the E&S market has been significantly driven by newer entrants, particularly fronting companies. However, these entities may face challenges due to adverse developments in accident years from 2021 to 2024, where many fronting companies have reportedly concentrated their efforts.

Interestingly, nine of the top ten participants in the E&S market reported growth in direct premiums written. The exception was Berkshire Hathaway, which saw a decrease of 12.4% in direct premiums written in Q3 2025 compared to the same quarter the previous year.

Topics
Trends
Excess Surplus
Pricing Trends

The U.S. excess and surplus (E&S) lines market is experiencing a slowdown in growth, with premium increases through September 2025 falling short of the previous year’s figures. This trend marks a notable shift in a sector that has enjoyed consistent expansion over the years.

According to a recent report from AM Best, a prominent insurance industry rating agency, while the E&S market continues to show growth, it is “showing signs of tapering off.” Specifically, premium growth in the E&S market rose by 9.7% through the third quarter of 2025. This is a significant decrease compared to the 13.5% growth observed during the same period the previous year. The decline can be attributed to competitive market pressures affecting specific lines of coverage, including cyber insurance, commercial property, and directors and officers liability.

AM Best anticipates that surplus line market premiums will stabilize in the near term. However, the market is expected to manage an increasing number of risks that are better suited for E&S coverage. “These changes have influenced both distribution and product strategies,” noted David Blades, associate director at AM Best. He highlighted that one area of focus is capacity for catastrophe-exposed property coverage. Surplus lines carriers have been able to provide flexibility and customization for risks that no longer align with standard underwriting frameworks.

In recent years, the growth of the E&S market has been significantly driven by newer entrants, particularly fronting companies. However, these entities may face challenges due to adverse developments in accident years from 2021 to 2024, where many fronting companies have reportedly concentrated their efforts.

Interestingly, nine of the top ten participants in the E&S market reported growth in direct premiums written. The exception was Berkshire Hathaway, which saw a decrease of 12.4% in direct premiums written in Q3 2025 compared to the same quarter the previous year.

Topics
Trends
Excess Surplus
Pricing Trends