Broker-sponsored facilities could face restructuring or withdrawals of capacity as rising claims severity and high acquisition costs test their ability to deliver sustainable underwriting results, according to Karen London (pictured), president of specialty casualty at QBE North America.
Broker-sponsored facilities give brokers access to capacity arranged with one or more insurers for eligible risks, often under an agreed coverage and underwriting framework. These arrangements can streamline placements and help assemble larger blocks of casualty coverage.
London believes the growth of these facilities to be among the most consequential developments for the excess and surplus lines market over the next 12 to 24 months.
“We expect continued growth in this area and may begin to see a separation between facilities built for long-term underwriting profitability and those driven primarily by premium volume,” London told Insurance Business.
London identified underwriting controls, disciplined pricing, appropriate attachment points and portfolio diversification as characteristics that can make facilities valuable to both brokers and insurers.
“But with high acquisition costs and claims severity continuing to increase, not every facility will deliver the results needed to maintain carrier support,” she said. “We may see some facilities restructured or capacity withdrawn, potentially shifting business back into the traditional E&S market. That could create opportunities for carriers that have maintained their underwriting expertise and broker relationships.”
The prospect of capacity moving out of some facilities comes as brokers continue to face limits on how much individual insurers will commit to casualty programs.
The warning comes as the US surplus lines market continues to expand. Total premium reached $143.2 billion in 2025, including business written by Lloyd’s and other overseas insurers, according to AM Best. Growth of 10.4% outpaced the broader US property/casualty industry’s 5.1% increase.
However, more recent data from state stamping offices points to slower premium growth. Surplus lines premium reported through the 15 state stamping offices reached $47.6 billion in the first half of 2026, up 2.8% year over year, while item filings increased 16.9%, according to the Wholesale & Specialty Insurance Association. These figures cover the participating states rather than the entire US market.
London cautioned against viewing admitted and non-admitted casualty business as two wholly separate pools, with accounts simply moving from one to the other as pricing changes. “Admitted and non-admitted carriers have participated on the same casualty programs for years,” she noted.
Standard insurers’ decisions to reduce their limits created opportunities for E&S insurers to take larger shares of those programs. Underwriting appetites will continue to shift through market cycles, moving individual classes between the two markets.
“Despite increased competition in parts of the casualty market today, we haven’t seen standard or E&S carriers meaningfully expand their capacity on casualty programs,” London said. “In some cases, we continue to see further reductions in limits.”
Large losses, increasing claims severity and the litigation environment continue to weigh on those decisions. London does not expect a significant near-term change, leaving brokers assembling casualty programs with continued constraints on individual carriers’ participation.
Alongside access to capacity, wholesale partners are placing greater emphasis on understanding how coverage will respond and who will handle a significant claim. Some wholesale partners have described significant claims that did not trigger the coverage response their clients expected, London said. Those experiences are prompting closer scrutiny of policy wording before placement.
Brokers and clients are also scrutinizing claims teams’ depth of experience and ability to respond as the facts of a complex loss emerge.
At QBE, claims specialists are embedded within the underwriting team and participate in discussions with underwriters, brokers and clients “to pressure test the wording and make sure the coverage reflects the intent of all parties,” said London.
“If everyone is not on the same page, we can then manuscript the coverage until everyone is comfortable,” she told Insurance Business.
