Surplus lines insurance in 15 key U.S. states saw a strong finish in 2025, with premium volume hitting $90.3 billion, according to the latest report from the Washington Surplus Lines Association (WSIA). This marks a nearly 8% jump from the previous year’s $83.8 billion and shows a notable increase in the number of policies written, which rose by over 14%.
Excess and surplus (E&S) lines play a critical role in the insurance market by covering risks that traditional insurers often avoid. These policies tend to protect businesses facing unusual risks, such as those with high claims or new industries not yet fully understood by standard carriers.
The surge in premium volume comes at a time when the E&S market is seen as stabilizing. In late 2025, AM Best adjusted its outlook on the U.S. E&S sector from positive to stable. They pointed to slowing premium growth and early signs that rates are softening. IMA Financial Group observed that carriers are facing stiff competition, especially for accounts exposed to catastrophes. Rates for certain risks have dropped by about 10%, with expectations that these reductions will continue into the first half of 2026 before leveling off in the summer.
While property insurance rates are easing, casualty and liability lines remain under pressure. Issues like social inflation and rising claim costs are particularly affecting general liability and commercial auto insurance, according to feedback from Smart Choice Agents.
Looking closer at state-level trends, California led with $22.1 billion in premiums—up nearly 6% from 2024—and saw a 30% rise in policy counts. Still, growth here was uneven, as noted by California Surplus Line Association CEO Benjamin J. McKay. Texas followed with a nearly 10% premium increase, largely driven by commercial property and liability coverage making up over three-quarters of the state’s total. Florida’s market grew more modestly at just under 2%, but policy numbers rose by nearly 12%, with the state entering a steadier phase, said Florida Surplus Lines Service Office CEO Mark Shealy.
Smaller states also saw impressive gains. Oregon topped that group with a 23.8% rise, followed by Utah, Pennsylvania, and Arizona with increases above 15%.
Looking ahead, AM Best highlighted emerging lines making their way more often to the E&S market. These include commercial auto, directors’ and officers’ liability, cyber liability, and ventures related to the expanding cannabis industry.
All in all, the E&S lines segment finished 2025 with solid growth in premiums and policies, even as it braces for softer rates and tougher competition in 2026. The market continues to serve a vital role for businesses with unique or high-risk profiles, offering protection where traditional insurance options fall short.