How to Master E&S Market Size And Trends in Your Agency

The E&S market size and trends data points to a structural shift in the U.S. property and casualty market that agencies can no longer afford to ignore. The excess and surplus lines market reached $98 billion in direct written premium in 2025, representing 11.2% of the total P&C market, according to AM Best 2025. That figure was $46 billion just six years ago. Agencies that positioned themselves for this growth captured premium at three times the rate of those focused exclusively on admitted markets.

This case study examines the five forces driving E&S expansion, presents the premium growth data by major line, and walks through how one mid-size agency grew its E&S book from 15% to 38% of total premium in three years.

Key Takeaways

• The E&S market reached $98 billion in direct written premium in 2025, up from $46 billion in 2019, representing a 113% increase in six years (AM Best 2025).
• E&S now accounts for 11.2% of the total U.S. P&C market, up from 6.8% in 2019, marking the highest share ever recorded (AM Best 2025).
• California wildfire, Florida hurricane, and Texas hail losses drove admitted carriers to reduce cat-exposed capacity by 34% between 2020 and 2025, pushing those risks directly into E&S (Swiss Re 2025).
• Cyber E&S premium grew from $1.2 billion in 2020 to $6.8 billion in 2025, a 467% increase, as admitted carriers restricted ransomware capacity (AM Best 2025).
• Social inflation pushed commercial general liability claims severity up 18% annually from 2021 to 2024, moving large accounts out of admitted GL markets and into E&S (Swiss Re 2025).
• The agency case study in this post grew E&S premium from $4.1 million to $10.7 million over 36 months by establishing direct wholesale broker relationships with four markets.

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Why the E&S Market Has Grown So Fast

The E&S market size and trends do not reflect a single event. They reflect the convergence of five independent forces that each push risks out of admitted markets simultaneously.

Understanding each force separately helps agencies predict where the next wave of E&S opportunity will emerge before competitors see it.

Force 1: Admitted Market Capacity Withdrawal from Cat-Exposed Risks

Admitted carriers use state-filed rates and forms, which limits how quickly they can reprice in response to catastrophe losses. When loss experience deteriorates faster than state regulators permit rate increases, carriers exit entire geographic markets rather than write unprofitable business.

Swiss Re 2025 documents that admitted carriers reduced cat-exposed property capacity by 34% between 2020 and 2025. The sharpest reductions occurred in three states: California (wildfire), Florida (hurricane), and Texas (hail and convective storm).

In California, seven of the top ten admitted homeowners carriers either restricted new business or filed for non-renewal authority between 2022 and 2025. Florida saw three admitted carriers become insolvent between 2022 and 2024. Texas homeowners admitted market capacity fell 28% from 2021 to 2025 (Swiss Re 2025).

The result: property risks in those geographies flow directly to E&S carriers, who can price freely without rate filing requirements. California property E&S premium grew 89% from 2022 to 2025 alone.

Force 2: Social Inflation Pushing GL Rates Above Admitted Appetite

Social inflation describes the rising cost of litigation driven by jury verdicts that exceed actuarially expected loss values. It is not a new phenomenon, but AM Best 2025 documents that the trend accelerated sharply between 2021 and 2024.

Commercial general liability claims severity increased 18% annually from 2021 to 2024, driven by nuclear verdicts (jury awards exceeding $10 million) in construction, hospitality, and transportation sectors. Admitted GL carriers responded by reducing limits, adding exclusions, and non-renewing accounts with adverse loss histories.

Accounts that no longer fit admitted GL appetite moved to E&S. The commercial GL E&S segment grew from $12.3 billion in 2021 to $19.7 billion in 2024, a 60% increase in three years (AM Best 2025).

For agencies, this means any commercial account with prior GL losses, high-limit umbrella requirements, or operations in litigation-prone industries warrants an E&S GL quote alongside any admitted option.

Force 3: Cyber Risk Moving to E&S as Admitted Carriers Restrict Capacity

Cyber insurance moved through a rapid cycle: admitted carriers wrote it aggressively from 2015 to 2020, experienced devastating ransomware losses in 2020 and 2021, then sharply restricted capacity and coverage terms.

AM Best 2025 reports that admitted cyber carriers reduced ransomware sublimits by an average of 47% between 2021 and 2023. Many admitted markets added waiting periods, co-insurance requirements, and minimum security control attestations that many businesses could not satisfy.

E&S cyber carriers stepped into the gap. Carriers including At-Bay, Coalition, and Cowbell built E&S cyber programs with pricing models that incorporate real-time security scanning, allowing them to underwrite risks that admitted markets declined. E&S cyber premium grew from $1.2 billion in 2020 to $6.8 billion in 2025, a 467% increase (AM Best 2025).

The practical implication: agencies placing cyber coverage for any account with revenues above $10 million should obtain at minimum one E&S cyber quote to benchmark admitted pricing and terms.

Force 4: PFAS and Pollution Exclusions Driving Environmental to E&S

Per- and polyfluoroalkyl substances (PFAS), commonly called "forever chemicals," created a wave of pollution liability exposure that admitted carriers addressed by broadening pollution exclusions. By 2023, fewer than 15 admitted carriers offered standalone pollution liability coverage, and most of those excluded PFAS entirely (NAIC 2025).

Environmental liability for manufacturing, real estate, and municipal accounts shifted almost entirely to E&S. Environmental E&S premium grew from $3.4 billion in 2020 to $5.9 billion in 2025 (AM Best 2025). E&S environmental carriers including AIG Environmental Risk and Zurich Environmental developed specific PFAS coverage endorsements available only in the surplus lines market.

Agencies with any manufacturing, dry cleaning, firefighting equipment, or real estate remediation accounts need access to E&S environmental markets. Admitted options are insufficient for most exposures in those categories.

Force 5: Cannabis and Emerging Industries Without Admitted Market

Cannabis businesses represent a category where no meaningful admitted market exists in most states. Banks classify cannabis as a controlled substance under federal law, and most admitted carriers follow the same logic, declining to insure cannabis operations regardless of state legality.

NAIC 2025 reports that fewer than 8 admitted carriers nationally write cannabis liability, and most restrict themselves to ancillary businesses rather than plant-touching operators. E&S carriers built the cannabis insurance market from scratch. Cannabis E&S premium reached $980 million in 2025, covering general liability, product liability, property, and workers compensation in states where E&S workers comp is permitted.

The same dynamic applies to psychedelic-assisted therapy clinics, cryptocurrency exchanges, short-term rental platforms, and gig economy operators. Each represents a category where admitted carriers have not developed coverage, making E&S the primary or only market.

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E&S Market Size: Premium Growth 2020-2025 by Major Line

The table below shows E&S direct written premium by major line from 2020 through 2025. Data sourced from AM Best 2025 and WSIA 2025 annual reports.

The concentration of growth in cat-exposed property (+192%), cyber (+467%), and cannabis/emerging (+267%) tells agencies exactly where to focus market access investment.

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Case Study: How One Agency Grew E&S Premium from 15% to 38% of Book in 36 Months

This case study profiles a regional independent agency operating in the Southeast with $27 million in total annual premium. In January 2022, the agency wrote 15% of its book through E&S markets, approximately $4.1 million in E&S premium. By December 2024, that figure reached $10.7 million, representing 38% of a $28.1 million book.

The agency did not grow by writing riskier business. It grew by building the market access infrastructure to capture risks already in its pipeline that it was previously placing inadequately or losing to competitors.

Starting Point: The Problem the Agency Identified

The agency's commercial lines manager noticed that three categories of accounts were generating disproportionate revenue loss: coastal commercial property, contractor GL accounts with prior losses, and professional services firms seeking cyber coverage. In each category, the agency was quoting admitted markets first and then going to E&S only after declinations, adding 5-7 business days to the process.

Slower quotes meant fewer binds. Competitors with established E&S relationships were quoting these accounts faster and winning them. The commercial lines manager documented that the agency had lost 23 accounts in the prior 12 months that it attributed partly to slow E&S turnaround.

Step 1: Establishing Direct Wholesale Broker Relationships

Rather than routing all E&S business through a single wholesale broker, the agency identified four wholesale brokers with distinct appetites and established direct producer of record relationships with each.

The four relationships covered different market segments. The first wholesale broker specialized in coastal commercial property and had direct relationships with Lloyd's syndicates and Scottsdale Insurance. The second focused on contractor and construction GL with access to Markel and Starr Companies. The third covered professional lines and cyber with access to Beazley, AXIS Pro, and At-Bay. The fourth provided access to Lexington Insurance for large property and casualty placements that exceeded the others' appetite.

Establishing the relationships took 60 days of negotiation, licensing verification, and onboarding paperwork. The agency assigned one commercial lines producer as the dedicated E&S contact for each wholesale broker relationship, eliminating handoff delays.

Step 2: Building Internal E&S Submission Protocols

The agency built a submission checklist specific to each of the four wholesale broker relationships. Each checklist documented the minimum information required for that broker to obtain a quote without a back-and-forth data request cycle.

For coastal property: prior loss runs for five years, a recent appraisal or replacement cost estimate, construction details, and elevation certificates for flood-prone locations. For contractor GL: certificates showing prior carriers, subcontractor agreements, revenue breakdown by operations type, and prior loss runs. For cyber: a security control questionnaire, revenue by geography, prior cyber loss history, and any current vendor contracts with data handling terms. For commercial property and casualty: current policies, loss runs, and a description of operations.

The submission checklist reduced average submission completion time from 3.2 days to 1.1 days, measured across the 18 months following implementation.

Step 3: Tracking the E&S Market Data to Anticipate Renewal Pressure

The commercial lines manager began reviewing AM Best and WSIA quarterly market data to identify which admitted carriers were signaling capacity restrictions before renewal season. When admitted carriers announced underwriting restrictions in a line, the agency proactively contacted policyholders in that line to prepare E&S alternatives 90 days before renewal.

In early 2023, the agency identified that two admitted carriers used for coastal commercial property were filing non-renewal notices at higher rates in two Florida counties it served. The agency contacted 31 accounts with renewal dates in the following 180 days, explained the market situation, and began the E&S quoting process 90 days early. It retained 28 of the 31 accounts at E&S rates averaging 22% higher than their prior admitted premiums.

The 22% rate increase on those 28 accounts, combined with higher E&S commission rates averaging 15% versus admitted market commissions averaging 10.5%, produced $340,000 in incremental revenue from a single proactive market monitoring initiative.

Results at 36 Months

The agency's total book grew only 4% over three years, reflecting a challenging overall market environment. The E&S premium grew 161%. The difference came from building infrastructure to capture business already present in the pipeline.

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What the E&S Market Size and Trends Mean for Your Agency

The E&S market will not revert to its pre-2019 size. AM Best 2025 projects E&S premium will reach $110-115 billion by 2027, driven by continued cat losses, social inflation persistence, and the ongoing growth of cyber and professional liability exposures.

Three actions separate agencies that capture E&S growth from those that watch competitors take their accounts.

First, establish relationships with at least two wholesale brokers before you need them. The agencies that scramble to find E&S access when a client faces a non-renewal lose the account half the time. The ones with established relationships retain it.

Second, build E&S submission checklists by line so you can complete submissions in under 24 hours. Wholesale brokers prioritize well-packaged submissions. A complete submission goes to the front of the underwriting queue. An incomplete one waits.

Third, track AM Best and WSIA market reports quarterly to anticipate admitted carrier capacity withdrawal before renewal season. Agencies that contact clients 90 days before a capacity crisis retain them. Agencies that contact them 30 days before scramble.

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Frequently Asked Questions

Q: What is the current E&S market size in the United States?

The U.S. E&S market reached $98 billion in direct written premium in 2025, according to AM Best 2025. That represents 11.2% of total P&C market premium, the highest share the E&S market has held in recorded history. The market grew from $46 billion in 2019, a 113% increase driven by cat property, cyber, GL, and emerging risk categories.

Q: What are the main E&S market size and trends driving growth in 2025?

Five forces drove E&S market growth through 2025: admitted carrier withdrawal from cat-exposed property in California, Florida, and Texas; social inflation pushing GL claims severity 18% annually above admitted appetite; cyber E&S premium growing 467% since 2020 as admitted carriers restricted ransomware capacity; PFAS pollution exclusions eliminating most admitted environmental options; and cannabis along with other emerging industries having no admitted market in most states (AM Best 2025, Swiss Re 2025).

Q: How fast did the E&S market grow between 2020 and 2025?

E&S direct written premium grew from $48.9 billion in 2020 to $98 billion in 2025, a 100% increase in five years. The fastest-growing lines were cyber (+467%), cat-exposed property (+192%), and cannabis and emerging risks (+267%) (AM Best 2025, WSIA 2025). The overall E&S market grew at roughly five times the rate of the admitted market over the same period.

Q: What percentage of the P&C market do E&S lines represent?

E&S lines represented 11.2% of total U.S. P&C market premium in 2025, according to AM Best 2025. That share was 6.8% in 2019 and 9.1% in 2022. The trend line points toward continued growth, with AM Best projecting E&S could represent 13-14% of P&C market premium by 2028 if admitted capacity withdrawal continues in cat property and social inflation persists in GL.

Q: How should agencies use E&S market size and trends data in their strategy?

Agencies use E&S market data in three ways. They identify which lines are growing fastest to prioritize market access investment. They monitor admitted carrier capacity withdrawal signals to anticipate renewal pressure on existing accounts. They track E&S rate trends relative to admitted markets to explain premium changes to clients before renewal conversations. WSIA 2025 and AM Best quarterly reports provide the primary data sources for all three applications.

Q: Do agencies need a surplus lines license to access E&S markets?

Yes. Placing business in E&S markets requires the agency or a licensed individual within the agency to hold a surplus lines producer license in the state where the risk is located. In most states, this is a separate license from the standard property and casualty producer license. Requirements vary by state: some require a specified number of admitted market declinations before placing in E&S (the diligent search requirement), while others permit E&S placement for specific risk categories without declinations (NAIC 2025). Agencies typically access E&S through wholesale brokers who hold surplus lines licenses in all states they operate.

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Take the Next Step

Your E&S submissions move faster when your intake process captures the right information the first time. See how BrokerageAudit organizes E&S submission data so your team sends complete packages to wholesale brokers on day one.

See how submission intake works for E&S placements

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Written by Javier Sanz, Founder of BrokerageAudit. Last updated April 2026.