The E&S Market’s Next Chapter: A Shift Toward Sustainable Growth

After several years of relentless acceleration, the excess and surplus (E&S) insurance market is finally entering a new era — one characterized not by volatility, but by sustainable momentum. According to a recent Insurance Insider US report, the E&S market closed out 2024 with $135 billion in premium — a 12.5% increase over 2023.

Yes, that’s still double-digit growth — but it also represents a modest deceleration from the 14.4% recorded the year before. And when compared to the massive 32.3% surge in 2021, the trajectory is clear: the E&S sector is cooling off — not collapsing — and finding a healthier rhythm for long-term performance.

In our view at DOXA, that’s not a warning sign. It’s a positive signal. A sign that the E&S market is evolving into its next phase — one marked by smarter underwriting, better balance, and more strategic partnerships. For agency owners, underwriters, and private equity buyers eyeing the space, the message is clear: E&S isn’t slowing down; it’s leveling up.

What’s Shifting — and Why It Matters

Over the past few years, property lines have dominated headlines. A perfect storm of CAT losses, inflationary pressures, and admitted market retrenchment drove premium into the E&S channel at an unprecedented pace. But as the property market begins to stabilize, E&S growth is becoming more diversified — and arguably, more resilient.

Take “other liability (occurrence)” lines, for example — these nearly doubled since 2020. Commercial auto, another historically tough class, continues to generate robust volume as carriers and brokers look for better ways to handle nuclear verdicts, fleet risk, and social inflation.

This isn’t just growth for growth’s sake — it’s a reallocation of market demand toward the lines that need E&S solutions the most. High-complexity, high-volatility risks that can’t be absorbed easily by the standard market are continuing to drive E&S relevance.

State-by-State Trends Tell a Bigger Story

E&S may be a national market, but it behaves with deeply local characteristics. In 2023, California, New York, and Illinois posted the strongest year-over-year growth. These are mature markets facing shifting regulatory pressures, social inflation, and evolving litigation climates — a ripe environment for E&S capacity to thrive.

In contrast, Texas and Florida, which had experienced meteoric E&S growth in recent years, are beginning to plateau. But again, this isn’t a contraction — it’s a rebalancing. These state-level nuances underscore the importance of local expertise in underwriting, distribution, and deal-making.

For MGAs, MGUs, and wholesalers, this reinforces the value of a decentralized model — one where boots-on-the-ground insight powers nimble decision-making. It also shows why acquirers and investors should be paying close attention to regional strength when evaluating E&S platforms.

At DOXA, We Call This ‘Disciplined Expansion’

What some are calling a “slowdown,” we see as a strategic recalibration. The past few years demanded speed, responsiveness, and market capture. But the next era of E&S is about precision. That means:

• Disciplined underwriting: Moving away from pure volume metrics and doubling down on risk selection, rate adequacy, and portfolio hygiene.

• Smarter analytics: Leveraging technology and data science to model emerging risks and anticipate market turns.

• Carrier alignment: Building deep, long-term relationships with insurers who value trust and transparency over transactionalism.

At DOXA, these principles aren’t just aspirations — they’re operating norms. They’re how we support our partners. And they’re how we evaluate our acquisition targets.

We look for E&S organizations that know how to win in a measured market. Teams that aren’t chasing the last few basis points of growth, but that are building defensible moats through expertise, access, and execution.

E&S Remains a Strategic Necessity

Let’s not lose sight of the big picture: E&S still plays a mission-critical role in today’s risk environment.

From emerging cyber threats to professional liability for evolving industries, E&S remains the go-to market for the exposures standard carriers can’t or won’t take. It fills the growing gap between what insureds need and what the admitted market is willing to offer.

The core value proposition hasn’t changed. If anything, it’s been validated over and over again.

What is changing is the way that value is delivered.

Where brokers and agents once sought E&S only as a last resort, they’re now making it part of the first conversation — especially for nuanced, niche, or newly developing risks. And the brokers who understand how to navigate this environment — with the right placement strategy, strong wholesaler relationships, and creative product access — are outperforming their peers.

Implications for M&A and Market Leadership

As this recalibrated market takes shape, we believe the most attractive acquisition targets in the E&S space will share three qualities:

1. Underwriting rigor: These businesses win not by quoting everything, but by winning the right accounts. Their books are stable, their loss ratios are enviable, and their clients are sticky.

2. Specialty depth: They play in complex niches where standard markets can’t compete — and where brokers need real guidance to close deals.

3. Distribution insight: They know where the market is moving — whether by geography, class of business, or regulatory trend — and they know how to seize that opportunity early.

At DOXA, we continue to build the industry’s best E&S platforms by aligning with teams who think long-term. Teams who believe sustainable growth and smart specialization are more powerful than chasing premium for its own sake.

We provide these teams with capital, scale, and operational support — but more importantly, we protect their autonomy and amplify what makes them great.

If you’re building something extraordinary in E&S, we want to hear your story.

The Road Ahead: High Conviction, Smart Moves

The E&S market isn’t slowing down — it’s leveling up. The volatility of the past few years brought growth, yes, but also unpredictability. What’s emerging now is a market that’s stronger, more selective, and better aligned for the long haul.

At DOXA, we’re excited about what’s next.

Because while the pace may be easing, the opportunities are expanding. From structured casualty programs to innovative solutions in commercial auto and specialty liability, E&S continues to evolve as one of the most dynamic corners of the insurance ecosystem.

And for those with the foresight to adapt and the partners to support them, the future is bright.

Ready to explore the next generation of E&S? Let’s talk. DOXA is always looking to grow with high-performing teams who are as committed to excellence as we are.