Overview
The US E&S property insurance market keeps getting louder. Capacity jumps, competition spikes, and brokers suddenly hold more options than they can use. Risk Placement Services says MGAs are pouring in fast, automated capacity shows up everywhere, and brokers now place deals with room to spare.
Clients use the extra flexibility to rebuild limits they lost in 2023 and shift premium savings toward lower deductibles. Strong year for buyers, tense year for underwriters.
That tension grows as rates drift downward. Underwriters worry the floor is slipping too fast. RPS says if rates fall 10% to 15% next year, some carriers will price business right at break even or below when measured against technical pricing (see Best U.S. P&C Insurance MGAs).
Key Highlights
- E&S capacity surges while rates soften, giving brokers more options than they can use and letting clients rebuild limits lost in 2023.
- Underwriters grow uneasy as pricing drifts 10% to 15% lower, threatening profitability with many already just 7.5% to 10% above technical levels.
- E&S grabs about 9% of the US P&C sector, nearly double its 2017 share, with surplus lines premiums up 13.2% in early 2025.
- Capital floods the property market, helping carriers post strong profits and pushing catastrophe exposed rates down 15% to 20% in 2025.
- North America records $60bn to $70bn in 2025 losses, but the market holds steady since a true momentum breaker now requires losses above $150bn.
Right now, underwriters hover about 7.5% to 10% above technical levels. Weather turns rough again and profitability gets dicey.
Excess and surplus (E&S) lines insurance is a type of coverage for financial risks that are too high to insure through the standard market and is obtained from an insurer that is not licensed in your state.
Businesses in high-risk industries often need coverage that standard carriers can’t provide. Increasingly, agents turn to the excess and surplus (E&S) market to find policies for them.
E&S grabs roughly 9% of the US P&C insurance sector
All of this plays out while E&S grabs roughly 9% of the US property and casualty insurance sector in 2025, nearly double its share in 2017.
Through the first half of the year, surplus lines premiums in reporting states climbed 13.2%. Commercial liability and property led the growth, no surprise there.
AM Best picked up on the shift and moved its outlook for the segment from positive to stable. They see slower premium growth and early rate softening.
The agency still believes underwriting performance holds steady for now, but warns that easing rates, social inflation, and catastrophe volatility demand constant attention. Nobody gets to relax.
The U.S. property and casualty insurance industry achieved its best underwriting performance in over 15 years in 2025. After 2 years of weak results, the industry has turned a corner, according to Swiss Re Insitute Report about US Property & Casualty outlook.
Strong premium growth and slowing claims cost inflation contributed to a combined ratio of 94%. Higher investment yields also provided a boost.
The P&C insurance industry’s return on equity reached 14%, with full-year forecasts projecting an ROE of 9.5% in 2024 and 10% in 2025, along with premium growth of 8% and 5%, respectively.
Personal lines continue to drive growth and profitability improvements, while competition is reemerging in personal auto. However, growth in commercial lines, including property, is slowing (see TOP 100 Property & Casualty Insurance Companies in the U.S.).
Capital swings into the property insurance market
Capital keeps flowing into the property space. Carriers expect strong profits for the third straight year, helped by quiet hurricane seasons in the Atlantic and Gulf.
The gains follow seven painful underwriting years before 2023, so the market feels almost forgiving compared with recent history.
London chatter hints that catastrophe exposed property rates in 2025 fell 15% to 20%. Most syndicates forecast another 10% cut next year and plan to shrink their books.
RPS says many syndicates now talk about sticking with long term profitable clients and resisting deeper market driven reductions. A shift back toward discipline, at least on paper.
Buyers walk into 2026 expecting one more year of competitive renewals.
Underwriters want to retain the accounts they like, trade rate for better terms, and stay aggressive on new business that fits their portfolios.
Clients, meanwhile, look ready to use savings to add coverage or trim retention. If a carrier won’t move, they’ll replace them. Simple as that.
The U.S. property insurance sector looks set to grow faster than the wider economy in 2025, with underwriting profit projected for the second year in a row.
Analysts pointed to steady premium growth, controlled replacement costs, and resilient economic conditions as the key drivers. Still, the outlook carries caveats.
The industry returned to underwriting profitability in 2024 for the first time since 2020. That profitability should hold in 2025, though margins will likely be thinner.
Property insurance losses and market impact
Despite claims whispers about a quiet year, North America booked $60bn to $70bn in insured property losses in 2025.
Most came from Los Angeles wildfires and spring flood and convective events. Big numbers, not market changing ones.
RPS says the momentum stays intact. The market only shifts if losses crash through something closer to $150bn.
Until then, the cycle keeps rolling, and the E&S property space looks like it’s entering another round of competitive pricing mixed with nervous underwriting.
Fitch Ratings notes that the U.S. P&C market is positioned for a return to underwriting profitability and significant capital returns for the full year, although results may not match levels due to uncertainties related to natural catastrophe exposures and loss reserve developments.
FAQ
Because MGAs are entering the space quickly, automated capacity keeps expanding, and brokers now access more capacity than most placements require. This pushes pricing down and gives buyers leverage.
Many restore limits they lost during the hard market in 2023, trim deductibles, and shift premium savings into broader coverage or better retention levels.
Yes. If rates drop 10% to 15% next year, some carriers risk writing at break even or worse when compared to technical pricing, especially with weather volatility still in play.
In 2025, E&S accounts for roughly 9% of the entire property and casualty market, nearly double its share in 2017, with strong growth in commercial liability and property lines.
Moderating premium growth, early signs of rate softening, and ongoing uncertainty from social inflation and catastrophe risk pushed the outlook toward stability instead of continued acceleration.
With carriers posting strong profits for three straight years and hurricane seasons staying relatively calm, significant capital is chasing property risks. This contributes to rate declines of 15% to 20% in 2025 and expected 10% cuts in 2026.
Not yet. Despite $60bn to $70bn in insured losses from wildfires, floods, and convective storms, RPS says the market only resets when losses top roughly $150bn, so momentum remains intact.
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by Nataly Kramer — Lead Editor of Beinsure Media
