U.S. excess and surplus (E&S) insurance is still expanding, but its growth rate moderated in 2025 because commercial-property capacity and competition pushed renewal prices lower. That weakness did not spread evenly across the market: E&S homeowners coverage grew rapidly as catastrophe-exposed risks left admitted insurers, while casualty and liability premiums continued to rise. The result is a market-mix shift rather than a broad collapse in E&S demand.
What changed in the E&S market
The clearest 2025 signal is slower growth in domestic E&S direct premiums, not a shrinking market. S&P Global Market Intelligence data reported by Business Insurance on April 1, 2026 show direct premiums written rising 7.8% to $105.31 billion. Insurance Journal’s April 10, 2026 summary rounds the total to $105.3 billion and calls the increase the first single-digit growth since 2017; Business Insurance describes it as the first since 2018. Those are source-specific historical characterizations, so neither should be treated as a reconciled industry-wide dating convention.
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The slowdown was concentrated in commercial property. More insurers and reinsurers supplied capacity, and competition reduced renewal pricing, particularly for large accounts. At the same time, homeowners risks that admitted carriers were unwilling or unable to retain moved into E&S, and liability business continued to add premium. Looking only at the headline growth rate therefore misses the different forces operating in each line.
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These totals are not interchangeable. S&P’s series is domestic E&S direct premium; AM Best’s later figures use a broader surplus-lines scope and separately identify domestic surplus-lines insurers.
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| Measure | Period and scope | Premium and change | What it shows |
|---|---|---|---|
| Domestic E&S direct premiums | 2025; S&P Global Market Intelligence, as reported by Business Insurance | $105.31 billion; up 7.8% | Growth remained positive but was slower than in recent years. |
| Commercial property | 2025; within S&P’s domestic E&S direct-premium data | $27.69 billion; down 2.8% | Competition and lower renewal pricing reversed earlier expansion. |
| E&S homeowners | 2025; within S&P’s domestic E&S direct-premium data | $4.14 billion; up 29.5% | Admitted-market displacement remained a powerful source of demand. |
| Total U.S. surplus-lines premium | 2025; AM Best, as reported by The Insurer on September 14, 2026 | $143.3 billion; up 10.4% | A broader market total than the S&P domestic direct-premium series. |
| Domestic surplus-lines insurers | 2025; AM Best, as reported by The Insurer | $105.9 billion; up 8.9% | A domestic-insurer measure that should not be treated as identical to S&P’s series. |
The differences in totals reflect coverage and reporting choices, not necessarily a contradiction. A surplus-lines total can include business outside the domestic direct-premium population used in another series, and stamping-office filings are a different activity measure from insurer-reported direct premium.
Why commercial property became the drag
More capacity changed the negotiating balance
Commercial property entered the 2025 renewal cycle with more available capacity than in the hardest parts of the recent property market. New and returning capital competed for accounts, while reinsurers and managing general agents (MGAs) also sought volume. When several markets are willing to quote a risk, buyers can press for lower rates, broader terms or both. That process reduces premium even when the insured value of buildings and equipment has not fallen.
Large accounts saw the sharpest rate movement
S&P Global Market Intelligence reported renewal-rate declines of 25% to 35% for large commercial-property accounts in the fourth quarter of 2025, according to Insurance Journal. This is a reported range for large accounts during that period, not an average for every commercial-property policy. Smaller accounts, tougher occupancies, catastrophe-heavy locations and risks with poor loss experience can receive very different terms.
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Premium can fall even when exposure does not
Commercial-property premium is influenced by insured values, deductibles, limits, catastrophe modeling, loss history and the rate applied at renewal. A lower rate can pull written premium down despite growth in replacement costs or property values. The available reports do not divide the market’s change into precise shares for rate, exposure, insurer appetite and reporting coverage, so it would be wrong to assign the entire decline to one factor.
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Why E&S homeowners moved in the opposite direction
E&S homeowners premium grew 29.5% in 2025 to $4.14 billion in S&P Global Market Intelligence’s data, as reported by Business Insurance. The main support was continued displacement from admitted markets, especially in states exposed to hurricanes, wildfires, severe convective storms or other catastrophe perils.
An admitted insurer generally files forms and rates with state regulators and operates within that state’s guaranty-fund framework. E&S insurers can use more flexible forms and pricing, subject to surplus-lines rules, which makes them a channel for risks that admitted carriers decline, restrict or price outside a customer’s budget. A homeowner may therefore see E&S premium rise even while commercial-property pricing softens: the homeowner segment is being pulled by availability problems, not by the same competitive supply cycle affecting large commercial accounts.
Growth in this line does not mean every homeowner is paying more or that every catastrophe-exposed state has the same market. It means more premium is being placed through the E&S channel because admitted capacity has receded for a meaningful set of properties.
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Casualty and liability kept expanding
Insurance Journal’s summary of the S&P data says liability and casualty represented 54.9% of the 2025 E&S direct premiums tallied, compared with 30.2% for property lines; commercial auto represented 5.6%. These shares describe the data set’s composition and help explain why a property downturn did not stop total E&S growth.
Casualty pricing and capacity respond to different pressures than property. Claims development, social inflation, litigation trends, auto losses, limits demanded by contracts and reduced appetite in certain industries can keep liability business in the E&S channel even when property competition intensifies. The available reports do not quantify how much of liability’s increase came from rate versus exposure or new placements, so the direction is clear but a single causal percentage is not established.
Carrier results illustrate dispersion rather than a market-wide cause. Insurance Journal reported Berkshire Hathaway’s E&S premiums down 12.4% to $7.4 billion in 2025, with its E&S property line down 22.7% to $3.1 billion. Those figures describe one carrier’s book and should not be used as a proxy for the entire market’s performance.
What the first half of 2026 adds
AM Best’s stamping-office data, reported by The Insurer in September 2026, show first-half 2026 premium of $47.6 billion, up 2.8% year over year. Within that filing-based measure, commercial property premium fell 13.7% to $15.7 billion, while commercial liability premium increased 11.2%.
Stamping offices process surplus-lines filings, so their totals are an activity snapshot rather than a direct substitute for the insurer-reported series above. They nevertheless show that the property-versus-liability split persisted into 2026: property was still under price pressure while liability was adding premium.
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AM Best’s review also describes more filed items despite modest premium growth, a pattern consistent with lower average prices, more granular placements or both. It reports increasing competition and supply outpacing demand in some specialty classes. The combination means an account may have more quoted capacity without producing proportionally more premium for the market.
How competition is changing the buyer’s position
AM Best said, as quoted by The Insurer, that “An abundance of capital and heightened competition among insurers, reinsurers, and managing general agents (MGAs) has shifted more of the negotiating power to the buyer’s or policyholder’s side.” For a commercial buyer, that can create room to test alternative structures, negotiate deductibles or seek broader manuscript wording. It does not eliminate underwriting discipline: catastrophe accumulations, construction quality, protection systems and loss history still determine which markets will quote.
For brokers, a softer property market can mean more time spent comparing forms and exclusions rather than simply locating any available capacity. A lower rate is not automatically a better result if sublimits, valuation clauses, waiting periods or contingent-business-interruption wording become less favorable. Buyers should compare the complete proposal, not just the premium percentage.
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AM Best expects more business to remain in E&S than in previous cycles even as conditions soften. Its assessment, reported by The Insurer, says: “Compared to historical business cycles, AM Best believes the enhanced importance of surplus lines intermediaries will negate any broad, rapid retreat from the surplus lines market as admitted carriers seek opportunities to grow their portfolios.”
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That view rests on structural demand. Catastrophe exposure, unusual commercial activities, high liability limits and changing admitted-market appetites continue to create risks that do not fit standard filings. E&S brokers and MGAs have developed specialized underwriting and distribution capabilities around those risks. A market can therefore experience lower rates in one class without sending all business back to admitted insurers.
What softer commercial-property pricing means in practice
For a business renewing coverage
- Start with a current statement of values and documented construction, roof, electrical and fire-protection updates. Better information can improve terms, but it does not guarantee a lower quote.
- Ask the broker to show rate change separately from changes in limits, deductibles, valuation and endorsements. That distinction reveals whether savings come from price or from reduced protection.
- Compare catastrophe sublimits, named-storm or earthquake deductibles, coinsurance provisions, vacancy language and business-interruption periods across quotes.
- Review the financial strength, claims process and licensing status of each proposed insurer through the relevant state surplus-lines framework; a lower premium carries no value if the coverage cannot respond as expected.
For a homeowner placed in E&S
- Confirm why the admitted market declined or restricted the risk and what underwriting information could change that decision at the next renewal.
- Check whether the policy covers replacement cost, ordinance or law, additional living expense and the specific catastrophe perils affecting the property.
- Understand the surplus-lines tax, stamping fee, deductibles and any exclusions shown separately from the base premium.
For analysts and investors
- Align geography, admitted or non-admitted status, direct premiums versus stamping-office filings and the reporting period before comparing market size.
- Separate premium growth caused by rate from growth caused by exposure, new business or movement from admitted carriers; the published reports do not provide a complete decomposition.
- Watch the mix of property, casualty, homeowners and liability rather than relying on one aggregate growth rate.
How to read the next E&S reports
Three checks prevent most misleading conclusions.
- Identify the population. Determine whether the figure covers domestic E&S direct premiums, all U.S. surplus lines, domestic surplus-lines insurers or stamping-office filings.
- Identify the line. Commercial property, homeowners, casualty, liability and commercial auto can move in opposite directions during the same year.
- Identify the measurement. A renewal-rate observation for large accounts is not the same as an average market rate, and filed premium is not identical to insurer-reported direct written premium.
Applying those checks explains why S&P’s domestic direct-premium growth, AM Best’s broader surplus-lines total and the 2026 stamping-office snapshot can all be accurate while showing different dollar amounts and growth rates.
The outlook: slower growth, but a larger role for E&S
The evidence points to moderation rather than reversal. Commercial-property competition is likely to keep testing rates where capacity is abundant, while catastrophe-exposed homeowners and difficult casualty risks continue to need non-admitted solutions. Liability’s positive direction and the persistence of specialized intermediaries provide support even if property premium remains soft.
For policyholders, the practical opportunity is improved choice in classes where insurers are competing. The practical risk is assuming that a cheaper renewal has the same protection. For the market, the central issue is mix: E&S can grow more slowly overall while becoming more important for the risks admitted carriers still cannot comfortably write.
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