Trends in the U.S. Excess and Surplus Lines Market for 2025
The U.S. excess and surplus (E&S) lines market witnessed a significant evolution in 2025. Direct premiums written reached an unprecedented $105.31 billion, marking the first instance the market topped the $100 billion threshold, as reported by S&P Global Market Intelligence. However, the growth rate decelerated notably compared to previous years.
According to S&P, E&S premium volume surged by 7.8% over the previous year, marking the first time since 2018 the market did not achieve double-digit growth. This slowdown is largely driven by a decline in commercial property premiums, which shifted from being a growth catalyst to a drag on the market.
The report outlines rising competition among admitted and non-admitted insurers, leading to diminishing pricing for commercial property renewals throughout 2025. Authorities observed that combined business lines of commercial property, including fire, allied lines, and commercial multiperil non-liability, contracted by 2.8% to $27.69 billion in direct premiums written.
Remarkable rate reductions intensified during the year. Ryan Specialty Holdings Inc.'s CFO, Janice Hamilton, highlighted in an earnings call significant rate decreases for large accounts, ranging between 25% to 35% in the final quarter, extending the trend from earlier periods. Some smaller businesses began to revert to the admitted market, though the shift was not substantial.
Individual lines exhibited varied performance; allied lines experienced a 5.4% decline in premiums to $9.68 billion, and fire premiums dropped by 4.0% to $12.13 billion. Contrastingly, commercial multiperil non-liability premiums increased by 4.7% to reach $5.88 billion. Meanwhile, the E&S homeowners market thrived, with a 29.5% boost in direct premiums totaling $4.14 billion in 2025, marking the third consecutive year of robust growth due to insurers' withdrawals and climate-induced risks in disaster-prone states.
The E&S market composition in 2025 attributes 54.9% to liability and casualty coverages, 30.2% to property lines, and 5.6% to commercial auto. Despite a downturn, Berkshire Hathaway Inc. retained its position as the foremost E&S underwriter, overseeing direct premiums amounting to $7.41 billion despite a 12.4% dip. American International Group Inc. emerged as the second-largest underwriter, seeing their E&S premiums rise from $5.60 billion to $5.91 billion, whereas The Travelers Cos. Inc. and Arch Capital Group Ltd. reported declines.
On the technology front, Bain & Co.'s report suggests that while many property and casualty insurers are leveraging artificial intelligence, their applications are not always prioritized correctly. Additionally, legislative movements across states aim to mitigate legal abuses, impacting industry risk management strategies.
Efficient care coordination plays a critical role in workers’ compensation outcomes. HCS Network Solutions' Donald Kent emphasized the necessity of arranging prompt medical appointments to minimize downtime for injured workers, enhancing their return-to-work process. MedRisk data reflects a noteworthy enhancement in time from injury to treatment, signaling a more efficient process. Collaborative insurer-provider efforts have been crucial in ensuring timely care, optimizing both medical and operational outcomes in the workers’ compensation sector.