E&S market’s growth rate slowed in 2024: Report

The U.S. excess and surplus market continued to grow in 2024 but at a slower rate for the second straight year, according to a report.

Although E&S premiums increased by double digits for the sixth consecutive year, year-over-year growth declined to 13.4% in 2024, down from 14.3% the previous year, according to the report, issued Wednesday by S&P Global Market Intelligence. Year-over-year growth peaked in 2021 at 32.3%.

The largest E&S growth rate came in the commercial auto market, up 22.4% in 2024 compared with 5.5% in 2023, according to the report. The E&S share of that market grew to 8.0% in 2024, up from 7.3% in 2023. Continued poor underwriting results in commercial auto could lead to further E&S market share gains in 2025, the report said.

Premiums rose 15.4% last year in the E&S property insurance market, the slowest growth in direct premiums since a year-over-year increase of 9.3% in 2018. Geographic areas with more significant exposures to catastrophic losses due to hurricanes and wildfires saw the largest E&S growth rates. For example, Hawaii’s E&S property premiums rose to $300.5 billion in 2024, up 87.1% from 2023.

Aggregated commercial liability lines returned to double-digit premium growth in 2024 after a slowdown in 2023. Direct premiums grew 12.3% in 2024 across four aggregated business lines, marking the fifth time in the past six years that premiums grew by more than 10%. U.S. E&S insurers reported $51.25 billion in direct premiums across four liability lines in 2024.

E&S accounted for 9.5% of the total direct premiums written in the U.S. in 2024, the report said, up from 9.1% in 2023. However, softening market conditions in some E&S business lines could lead to a slowdown in the industry’s overall market share gains in 2025, according to the report.