E&S momentum continues for now as Texas premium jumps 15% in Q1

The Surplus Lines Stamping Office of Texas (SLTX) has reported $1.67bn of excess and surplus lines premium was recorded in its state in the first quarter, up 14.5 percent over the first quarter of 2019 and 27.4 percent higher than the first quarter of 2018.

Each month of this year so far set a new record for that month. Texas had $540.0mn of E&S premium in January, $502.9mn in February and $622.7mn in March.

However, total filings fell 0.4 percent in the first quarter, to 259,952 from 261,056 in the first quarter of 2019.

The coronavirus pandemic would likely not have had a big impact on the Q1 filing figures because it only really began taking hold in the US during March. But SLTX said it is possible Covid-19 will affect filing figures for the second quarter.

“Based on recent years, E&S premium recorded in Texas generally rises during the summer months,” SLTX commented. “However, the coronavirus (Covid-19) pandemic first reached the United States this quarter, and it is unclear how much the virus will impact the market moving forward.”

The Q1 increase in E&S premium in Texas was similar to that seen in the state for the whole of 2019. E&S premium was up 14.4 percent last year to $6.95bn.

The premiums recorded by the 15 US surplus lines stamping and service offices hit $37.45bn in 2019, which was up 19.3 percent on the $31.39bn in 2018.

As previously reported, 2019 was a record year for the E&S sector on several measures, including submission flow through the wholesale channel as business flooded in as a result of retrenchment from standard markets.