The excess and surplus (E&S) lines segment of the insurance industry continues to be the essential market for risks for which the standard insurance market typically does not offer coverage. From extremely hazardous conditions to highly unique business operations and unproven new products, these unconventional risks are often complex and challenging. The E&S market's challenge is to develop products to cover these exposures utilizing its expertise and freedom of rate and form.
E&S business is largely produced through the wholesale distribution channel. These wholesale brokers and Managing General Agents are typically product line or business industry focused, therefore, providing valuable expertise as part of the transaction. E&S business is highly concentrated by territory, as over 50 percent of annual direct written premium is in the states of California, Florida, Texas, New York and Illinois.
Guy Carpenter's Insurance Risk Benchmark's Research Report uses 2016 as its baseline year. Year 2017 was a transitional year and the evolution will continue in 2018 as the market changes from extremely soft to generally harder.
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