CA, FL and TX all book double-digit surplus lines growth in 2024

By Chris Munro

Jan 29 - (The Insurer) - The three largest surplus lines stamping offices all once again registered record levels of premium volume in 2024 with California, Florida and Texas seeing double-digit growth.

Collectively, the three states’ surplus lines stamping offices booked $52.7bn of premium volume in 2024, growth of 13.1 percent from 2023.

While yet another example of double-digit growth, that 13.1 percent is actually a slow-down from the 17.1 percent increase from 2022 to 2023.

California again led the way as the largest state for surplus lines business in 2024, with Florida in second place and Texas taking up third spot.

CA growth slows

In 2024, California’s surplus lines market maintained its significant growth trajectory of recent years.

As data from the Surplus Lines Association of California (SLACA) shows, the state saw $19.1bn of premium flow through its surplus lines channel in 2024, up from $16.6bn in 2023.

The SLACA figures show that surplus lines premium volume increased in every month during 2024, bar March and August when it decreased by 13.4 percent and 0.3 percent respectively.

The growth in California’s surplus lines market last year can chiefly be attributed to admitted carriers’ pullback from the state due to concerns over wildfire exposure and an inability to secure regulatory approval for the rate rises they feel are warranted.

With few alternatives other than the highly restricted fire coverage offered by California’s insurer of last resort, the Fair Plan, buyers have found themselves seeking protection from the surplus lines market.

Even with various new initiatives recently implemented by California’s insurance commissioner Ricardo Lara to draw admitted carriers back into the state’s homeowners’ market, the recent devastating wildfire losses in and around Los Angeles will likely push even more business into the excess and surplus lines channel in 2025.

California significantly extended its surplus lines premium volume lead over Florida in 2024.

In 2022, California’s surplus lines premium volume of $16.2bn was almost $4.2bn higher than the $12.1bn that Florida generated that year. In 2023, that gap narrowed to just $1.3bn.

FL surplus lines premium volume grows 11%

Last year that gap widened to $2.0bn after the Sunshine State booked $17.1bn of surplus lines premium volume in 2024, figures from the Florida Surplus Lines Service Office (FSLSO) show.

That $17.1bn represented growth of 10.8 percent from 2023, the FSLSO data shows.

Similarly to California, just two months saw surplus lines premium volume tracked by the FSLSO contract.

As in the Golden State, it was in March and August when the FSLSO saw year-on-year monthly declines in surplus lines premium volume, with reductions of 10.5 percent and 3.8 percent respectively.

The business line that made the biggest contribution to Florida’s surplus lines premium volume in 2024 was commercial property at $6.5bn.

According to the FSLSO, that $6.5bn of commercial property surplus lines premium was an increase of 6 percent from 2023.

Commercial general liability was the second-greatest contributor, with the $2.5bn booked in 2024 an increase of 18 percent from the prior year. In third place was excess commercial general liability with $1.3bn of surplus lines premium in 2024, up 38 percent year on year.

Fourth spot went to commercial package business with premium volume of $840mn, a reduction of 1 percent from 2023.

And in fifth was homeowners HO3 business, which generated $657mn of surplus lines premium volume in 2024, up 14 percent from the prior year.

TX surplus lines premium volume up 14%

The Surplus Lines Stamping Office of Texas tracked $16.6bn of premium volume in 2024, growth of 13.8 percent from the prior year.

That growth was a slowdown compared with the 26 percent expansion that the SLTX recorded between 2023 and 2022.

In Texas, September saw the biggest increase in premium volume, with a 35.7 percent from the prior year to $1.43bn.

Only one month saw a year-on-year monthly decrease – surplus lines premium volume fell by 3.5 percent from the prior year period to $1.13bn in March.

As the SLTX noted, “Texas surplus lines premiums continue to trend with existing hard-market conditions, including results of changes to diligent effort requirements”.