Research
Conning: U.S. E&S Market Achieves 21% Compound Growth Over the Past Five Years, Surpassing $104 Billion in Premiums in 2023
The Excess and Surplus (E&S) insurance market has experienced unprecedented growth, achieving a remarkable 21% compound annual growth rate over the past five years and surpassing $104 billion in premiums in 2023. This sustained expansion underscores the market's resilience and adaptability, as it continues to outperform the admitted market by addressing complex, nonstandard risks that traditional insurers often reject.
"The E&S insurance market continues to exemplify resilience and innovation, navigating both cyclical and structural challenges with agility," said Lauryn Kothavale, a Vice President of Insurance Research at Conning. "Looking ahead, the growing demand for tailored coverage solutions highlights the sector's indispensable role in mitigating complex and evolving risks."
The surge in demand for innovative and tailored insurance solutions has been a key driver of the E&S market's growth. Since 2017, a wave of new entrants has reinforced the sector's capacity to meet these challenges, demonstrating robust demand for its offerings. The market's ability to deliver bespoke coverage aligns perfectly with current trends, as policyholders increasingly seek customized solutions to address evolving risks.
While the E&S market's growth has been impressive, it has not been without challenges. From 2017 to 2023, increased catastrophe activity and rising settlement costs have posed significant hurdles, leading to heightened liability claims and volatility in underwriting performance. However, the sector's innovative approach and flexibility in addressing these challenges have allowed it to maintain its pivotal role in the broader insurance landscape.
Jerry 2025 State of the American Driver Report: Soaring Costs Push Drivers to Reevaluate Insurance, Car Buying, and Household Budgets
Jerry, America's AllCar™ app, today releases the findings from its fourth-annual State of the American Driver Report, revealing how rising car ownership costs are tightening household budgets and shifting planned 2025 spending. The report offers insights into how Americans are reacting to this prolonged era of sky-high-cost car ownership, including their outlook on car buying, views on electric vehicles (EVs) and hybrids, ability to afford insurance and repairs, and attitudes toward AI driving technology and data collection.
The 2025 State of the American Driver Report analyzes results from a national survey of 1,000 American drivers across all age groups and regions of the country, combined with internal research on topics including insurance rates, inflation, and data-collection attitudes. Jerry found that American drivers are feeling the pressure financially and are making a number of adjustments to offset these elevated ownership costs, including:
Coverage Trade-Offs: A majority (55%) of drivers shopped around for car insurance in search of relief from soaring rates in the past 12 months, up from 38% a year ago. More than one in five (22%) say they have switched insurers to take advantage of lower rates when they find them in the previous year. More than a quarter (27%) chose a higher deductible in return for a lower rate, while 26% reduced their coverage.
Impacts Across Income Levels: The cost of car insurance has forced people to cut spending elsewhere, including on family vacations (32% of respondents), clothing (30%) and groceries (26%). Nearly half (49%) of high-income earners—making over $129,000 annually—shopped around for better deals in the last year and 53% settled for less coverage than they thought they might need..MORE
"Car insurance is more than just another expense—it's become a financial stressor reshaping how people approach broader buying decisions," says Jerry CEO and co-founder Art Agrawal. "Drivers are reducing coverage, raising deductibles, and switching insurers to combat these elevated costs. Many are even forgoing vacations, new clothes, and groceries to better manage budgets. It's a reality that our team is committed to changing for good with our mission to make car ownership affordable and accessible."
News
Car-Rental Startup Turo’s Safety Team Cuts Vacations Short After Deadly Attacks
Some workers on car-rental startup Turo Inc.’s trust and safety team have interrupted vacations to monitor and respond to the aftermath of deadly attacks in Las Vegas and New Orleans, according to a person familiar with the matter.
In both incidents, which the FBI has said appear to be unrelated, the drivers used cars they procured on the platform to inflict violence. The attacks, both of which happened Wednesday, highlight how the rental marketplace can be used cheaply and easily to procure large vehicles that can be used as weapons. The incidents are also creating a public relations setback for San Francisco-based Turo, which has had aspirations to sell shares in an initial public offering, and prompted the company to defend its procedures for vetting customers. READ ON
Rising US Auto Insurance Rates Are Disproportionately Hurting Classic Car Owners
If you think your auto insurance rates have skyrocketed in recent years, you'd be right. The Consumer Price Index (CPI) saw the cost of auto insurance rise 51% over the past 3 years, six times faster than inflation overall.
What made auto insurance see the biggest price jump in the CPI? Blame the lingering effects of COVID and the increase in reckless behavior seen on US roads. There were more frequent, faster-than-normal speeding drivers and drunk driving surged, leading to a spike in crash severity, all of which led to more catastrophic vehicle and injury claims on auto insurers. Moreover, the pandemic created materials, parts, and labor shortages, causing repair costs for customer claims to climb like never before. Both factors combined have caused auto insurance rates to soar with little relief in sight.
Good Drivers and Auto Collectors Are Being Overcharged
In addition to the severe insurance rate increases impacting law-abiding daily drivers, collectors of classic, antique, and custom cars are among the most severely affected by these insurance cost increases. Meanwhile, agents and brokers who service this community are struggling to keep their clients' rates under control.
These collectors face a double inequity: not only are they statistically less likely to get into an accident or file a claim, but standard auto insurers often don't offer proportionally lower rates for owners who typically drive their vintage vehicles fewer than 5,000 miles annually - compared to the average 12,000+ miles driven in other vehicles.
In effect, auto collectors and good drivers have been quietly subsidizing the catastrophic losses felt by insurance companies.
Insurers to be required to increase home coverage
Insurance companies that stopped providing home coverage to hundreds of thousands of Californians in recent years as wildfires became more destructive will have to again provide policies in fire-prone areas if they want to keep doing business in California under a state regulation announced Monday.
The rule will require home insurers to offer coverage in high-risk areas, something the state has never done, Insurance Commissioner Ricardo Lara's office said in a statement. Insurers will have to start increasing their coverage by 5% every two years until they hit the equivalent of 85% of their market share. That means if an insurer writes 20 out of every 100 state policies, they'd need to write 17 in a high-risk area, Lara's office said.
Major insurers like State Farm and Allstate have stopped writing new policies in California due to fears of massive losses from wildfires and other natural disasters.
In exchange for increasing coverage, the state will let insurance companies pass on the costs of reinsurance to California consumers. Insurance companies typically buy reinsurance to avoid huge payouts in case of natural disasters or catastrophic loss. California is the only state that doesn’t already allow the cost of reinsurance to be borne by policy holders, according to Lara's office.
Commentary/Opinion
End of asphalt shingle roofs in Florida? Top official asks if they should be ‘written out of the plot’
Is it time to phase out asphalt shingle roofs in Florida?
Florida’s insurance commissioner hinted at the recent Florida Chamber Insurance Summit that he’d like to see their days come to an end.
“It’s probably time to look past asphalt shingles,” Michael Yaworksy told a crowd of insurance executives. “You know, these products that are guaranteed to last for 30 years. They don’t last for 30 years in Florida. They just don’t.”
But does that mean that asphalt shingle roofs should be “written out of the plot”? Top roofing industry officials are skeptical.
They concede that asphalt shingles only last an average of 20 years in Florida and are more vulnerable than metal or clay and concrete tiles to being damaged or blown off by hurricane-force winds. But they say that if installed correctly, more affordable asphalt shingle roofs can resist wind uplift and protect homes from water intrusion.
Roof coverage issues have bedeviled insurance companies in Florida since Hurricane Andrew struck the state in 1992. More recently, complaints by many insurers about roofing contractors who ask to perform free roof inspections, “find” hail damage, then submit insurance claims that secure roof replacements at no cost to homeowners have triggered several reforms.
They included repeal of the Florida Building Code rule that required replacement of entire roofs when more than 25% was damaged, and a change in state law to allow insurers to cover the depreciated value rather than full replacement cost of roofs in basic homeowner policies. Insurers must still offer full replacement coverage for a higher premium.
Most of the questionable claims involved asphalt shingle roofs because they are most common. Nationwide, an estimated 80% of roofs are covered by asphalt shingles while in Florida, the director of technical services for the Florida Roofing and Sheet Metal Contractors Association says a more accurate estimate is between 60% and 65%.
The Role of Data Cleansing in Insurance | Insurance Thought Leadership
As the insurance sector evolves with technological advancements, prioritizing data cleansing is more vital than ever.
In the insurance industry, maintaining clean and accurate data is crucial for informed decision-making. Data cleansing—the process of eliminating errors and inconsistencies—directly affects underwriting, risk management, and operational efficiency. The CRO Forum highlights that data quality maturity outside regulatory frameworks is inconsistent, often managed at the operational level with limited top management involvement.
Additionally, Deloitte identifies data quality as a top challenge for insurers, necessitating regular audits to ensure data accuracy, timeliness, and relevance.
As the insurance sector evolves with technological advancements, prioritizing data cleansing is more vital than ever to enhance decision-making, ensure compliance, and improve customer satisfaction.
Key Takeaways
- Data cleansing is crucial for accurate underwriting and risk assessment.
- Technological tools like AI can automate data cleansing, making it faster and more reliable.
- Human oversight is still necessary to validate results and make complex decisions.
- Poor data quality can lead to significant financial and compliance risks for insurers.
- Investing in data cleansing tools can enhance customer experience and operational efficiency.
Impact on Underwriting Precision
When it comes to underwriting, precision is key. If the data is off, even by a little, the errors can lead to big mistakes. Policies might be overpriced or underpriced, and that's not good for anyone. Clean data helps insurers make better, more accurate decisions. It's like having a clear map when you're on a road trip. You get where you need to go without any detours. MORE
Matthew Trumbull is the global sales director at WinPure
InsurTech/M&A/Finance💰/Collaboration
Sentry completes acquisition of The General® from American Family Insurance
Sentry Insurance, one of the nation's top mutual insurance companies, today announced the successful completion of its acquisition of The General®, a leading provider of non-standard auto (NSA) insurance, from American Family Insurance. The $1.7 billion transaction, first announced in September, represents the largest acquisition in Sentry's 120-year history. NSA insurance is for drivers who face challenges obtaining standard auto coverage.
The acquisition strengthens Sentry's position in the NSA market by combining the expertise and reputations of its Dairyland® brand and The General. Moving forward, the company will adopt The General as its primary brand for the NSA market, creating a single, stronger presence in the industry.
"This marks an exciting new chapter for Sentry and The General," said Pete McPartland, Chairman and CEO of Sentry. "By bringing together Dairyland's independent agent network and The General's direct-to-consumer expertise, we're uniquely positioned to offer greater flexibility and accessibility to drivers across the U.S. I'm thrilled to welcome The General's 1,300 associates to the Sentry team and look forward to what we'll achieve together."
The General's associates officially joined Sentry's 5,000-strong workforce today, January 1, 2025. The General will maintain its office in Nashville, Tennessee, ensuring continuity for employees and customers during the transition.
Sentry was advised on legal matters by Sidley Austin LLP, with J.P. Morgan acting as financial advisor.
Takeaways from Gallagher's call on acquiring AssuredPartners
On December 9, Gallagher discussed its acquisition of AssuredPartners . Here are the key highlights:
Acquisition Overview
AJG acquired AssuredPartners for $12.45 billion, benefiting from a $1 billion deferred tax asset to lower costs. AssuredPartners is a US insurance brokerage focused on the middle market and specialty segments. “I have to say our due diligence confirmed that AssuredPartners business and talent are top-notch. They are growing organically through M&A and are operating at attractive margins today. In so many ways, the business is a lot like Gallagher. And to the new 10,900 colleagues that will be joining the Gallagher family of professionals. Let me say right now, you’re going to feel right at home within the Gallagher culture.” – CEO Patrick Gallagher.
Market Position, Revenue and Growth
AssuredPartners, the 11th largest US insurance broker at the end of 2023, placed approximately $11 billion in premiums and contributes $2.9 billion in pro forma trailing 12-month revenue, with $938 million in adjusted EBITDAC, projected to increase to $1.1 billion with $160 million in expected synergies. Most of AssuredPartners’ revenue is US-based, with approximately 60% from retail property and casualty (P/C), 25% from retail benefits, and the remaining 17% from wholesale specialty operations. FULL STORY
Telematics, Driving & Insurance
Reporter’s Notebook: ‘Nobody Else Does Telematics,’ Lemonade Exec Says
Executive Summary
What message should investors take away when a CEO asks them to “suspend disbelief”? Lemonade’s CEO Dan Schreiber did just that when he proclaimed that Lemonade, which acquired usage-based insurer Metromile in 2022, is the only auto insurer “doing telematics.”
AI in Insurance
AI-Driven Claim Processing: Speeding Up Insurance Claims with Technology - TechBullion
Speed and efficiency are paramount in every industry, and the insurance sector is no exception. Traditionally, claim processing in insurance has been a lengthy and often frustrating process for customers. Long wait times, tedious paperwork, and human errors have been common complaints.
Enter artificial intelligence (AI): a transformative force that is revolutionizing claim processing by making it faster, more accurate, and customer-friendly. AI-driven claim processing is not just a buzzword; it’s a reality shaping the future of the insurance industry.
Understanding AI in Claim Processing
AI is a branch of computer science that enables machines to simulate human intelligence. It uses algorithms and data analysis to learn from patterns and make decisions. When applied to claim processing, AI automates tasks that traditionally required human intervention, such as document verification, fraud detection, and claim assessments.
The integration of AI in claim processing involves technologies like machine learning (ML), natural language processing (NLP), computer vision, and robotic process automation (RPA). These technologies work together to streamline workflows, improve accuracy, and enhance customer satisfaction.
Events
ClimateTech Connect April 15-16, 2025
Ronald Reagan Building and International Trade Center / Washington, DC
ClimateTech Connect is the premier global conference and tradeshow for leaders advancing innovation in climate adaptation, resilience, and profitable sustainability through technology.
ClimateTech Connect brings together thought leaders, innovators, policymakers, and leading industry experts to explore the intersection of climate resilience strategies and technology. We are expecting 1500 attendees from the following industry sectors:
● Insurance and Financial Services
● Corporates
● Investors
● Government
● Start-ups and Scale-Ups
Join us for two days of inspiring keynotes, panel discussions, workshops, an electrifying expo hall + demo stage, and networking as we delve into the latest advancements and solutions in climate resilience.
Together, we will shape a more sustainable future.
InsurTech Consulting and our 'Connected’ newsletter are proud media partners of ClimateTech Connect with a special 20% discount for our subscribers”. Use code:Connected20, register HERE
Canada
What Trump’s victory means for Canada’s insurance sector
Following his U.S. presidential election win on Nov. 5, Donald Trump’s return to the White House will have a broad-sweeping impact on Canada’s trade, economics, and, inevitably, insurance, industry sources tell Canadian Underwriter.
Sources suggest a variety of ways Trump’s re-election could touch on Canada’s property and casualty insurance sector, including geopolitical and economic risk, reinsurance rates, and regulation.