Surplus lines writings of $9.1 billion in Texas for 2021 represent a 14.9 percent increase compared with 2020, making it the highest year of surplus lines premium in Texas history, according to the Surplus Lines Stamping Office of Texas. Each month of 2021 set a new record high for that month. As stated on SLTX’s Policy and Premium Report, policy count, however, was down for the year by 2.5 percent.
Annual excess and surplus lines premium in Texas has had steady growth since 2016, when total premium was $5.12 billion. In 2017, E&S premium processed by SLTX was $5.46 billion; in 2018, $6.08 billion; in 2019, $6.95 billion, and in 2020, $7.92 billion.
Every quarter this year showed double digit percentage growth over the prior year-to-date results, a growth trend that repeats last year’s.
SLTX’s Jan. 6 eNews on December’s results noted that the top two growth lines for the month were Fire and Allied Lines and Commercial Auto Liability.
Other Liability, the largest coverage in surplus lines, ended 2021 with a 16.95 percentage growth over the previous year. This growth was accompanied by a 3.60 percent growth in the number of policies filed in this line. Fire (including Allied Lines), the second largest coverage in surplus lines, had a 2.16 percent premium growth with a 7.42 percent reduction in the number of policies filed.
Together, at year end 2021, these two major lines made up 76.92 percent of all taxable surplus lines premium reported to SLTX.
There was an increase of about $30.9 million in multi-state premium reported to SLTX for 2021, compared with 2020, even though multi-state policy count was down by 6.40 percent. Multi-state premium increased 9.18 percent, as brokers reported $367.65 million in premium for multi-state risks, compared with $336.72 million in 2020. Multi-state premium made up 4.04 percent of 2021 taxable surplus lines premium, down from 4.25 percent in 2020. Multi-state policy count for 2021 was 2,766, compared with 2,955 filed in 2020. Average premium on multi-state policies was $132,917.
There were 698,862 policy filings received by SLTX in 2021, compared with 717,103 policies filed in 2020, a 2.5 percent decline in policy count. Average premium per policy in 2021 was $13,023, which is 17.86 percent greater than the 2020 average per policy of $11,050.
Policy counts reported by line include some double counting; when SLTX receives multiline policies, it splits the premium among the applicable lines. SLTX reported that its policy filings counted by line totaled 723,171 in 2021, a 1.25 percent decline from 2020 which had 732,339 policy fillings counted by line.
The largest increase in the number of policies filed was in Allied Lines, which was up 13,349 policy filings, pushing the line’s policy count up by 34.62 percent over 2020’s. There were 51,905 policy filings in Allied Lines in 2021, versus 38,556 filed in 2020.
Along with Fire (including Allied Lines) showing a premium increase despite a decrease in policy count were Products Liability and Burglary and Theft. Products Liability had a 30.16 percent premium growth despite a 14.64 decline in the number of policies filed; Burglary and Theft premium was up 131.32 percent, despite a 1.90 percent drop in number of policy filings.
In all, total premium in 16 of the 22 lines of business reported to SLTX in 2021 was up compared with the previous year. The lines of business that showed the greatest dollar growth were Other Liability, which was up $581.92 million, or 16.95 percent, compared with 2020, and Commercial Multiple Peril, which was up by $259.79 million, or 75.12 percent.
The second largest line by premium, Fire (including Allied Lines) was up $57.37 million or 2.16 percent.
Other Liability is now reported in 23 subcategories, a more refined division than was reported in 16 subcategories last year. Only five of the continuing subcategories showed declines, with the declines partially explained by the change in reporting requirements that started in January. Within Other Liability, the coverage showing the greatest dollar growth was Excess/Umbrella, which increased by nearly $289.52 million, or 20.97 percent. Next year’s comparison by subcategories will reflect the more detailed accuracy of the 23 subcategories.
Fire (including Allied Lines) is reported in seven subcategories, separating commercial from residential risks. Prior year reporting had three subcategories. Again, more detailed and reliable comparisons will become available at the end of 2022 when the new reporting categories will reach a two-year maturity. Overall, the line had a 2.16 percent growth in premium over 2020.
In addition to the strong results in the top three lines by premium, other lines showed both multimillion dollar and double digit or more percentage increases. Other Commercial Auto Liability was up $115.13 million, or 37.00 percent; Allied Lines, up $67.43 million, or 26.81 percent; Credit was up $47.80 million, or 45.96 percent; Commercial Auto Physical Damage was up $33.40 million, or 15.39 percent. Ocean Marine was up $20.33 million, or 75.83 percent, and Inland Marine was up $16.27 million or 15.06 percent.
Products Liability was up $8.10 million, or 30.16 percent, and Fidelity was up $8.02 million, or 670.14 percent. Burglary and Theft rose by $4.87 million or 131.32 percent, and Surety and Other Private Passenger Auto Liability rose to positive premium after being in negative premium status last year.
The six lines showing premium decreases made up 5.38 percent of all surplus lines writings in 2021, with Homeowners Multiple Peril, down $27.31 million or 12.31 percent. Medical Malpractice was down $14.35 million or 12.41 percent; Group Accident and Health was down $7.58 million or 10.26 percent. Also down were Aircraft All Perils, Earthquake and Farmowners Multiple Peril. There was no premium reported in Boiler and Machinery for 2021 or in 2020.
With 2.80 percent of all surplus lines premium written in Texas in 2021, Homeowners Multiple Peril was the highest premium volume line experiencing a premium decrease compared with 2020. While Homeowners Multiple Peril premium declined by 12.31 percent, the number of policies filed in the line decreased by a greater percentage, 23.72 percent.
Nearly all lines reporting decreases in premium also had decreases in the number of policies filed. The exceptions to this were reported in Earthquake and Aggregate write-ins for other line, which had slight increases in the number of policies filed, but a decline in premium. An SLTX analyst said that the large decline in premium reported as an Aggregate write-in is attributed to a policy that represented 72 percent of the overall premium in the line for 2020, but was not filed as a renewal in 2021.
By year-end, SLTX collected $7.69 million in stamping fees, a 35.3 percent decline from last year. Online filings were only marginally above last year’s online filings at 98.4 percent of all filings. The number of mailed in filings for the year declined, from 23,391 in 2020 to 17,330 in 2021. SLTX processed nearly the same number of filings in 2021 as in 2020.