The US excess and surplus lines market is entering a more competitive phase heading into 2027, with property business retreating from recent highs even as casualty and other specialty classes continue to create opportunities for wholesale broker.
That’s the view of Brady Kelley (pictured), CEO and president of the Wholesale & Specialty Insurance Association (WSIA). He noted that surplus lines premium reached $143.3 billion in 2025, an increase of 10.4%. This growth has outpaced the broader US property and casualty market, which expanded 5.1%. But it also masks a changing mix of business as admitted carriers regain appetite in some areas and competition increases across the specialty market.
“The E&S market remains a core component of the US property/casualty market, and we continue to see business flow into E&S as standard market underwriting appetites change,” Kelley told Insurance Business ahead of 2026 WSIA Annual Marketplace, which takes place from October 11-14 in San Diego, California.
Data from the 15 US states with surplus lines stamping offices illustrates that shift.
Non-professional liability remained the largest E&S segment at midyear, representing 39.6% of premium and growing 11.2% compared with the same period in 2025.
Property, meanwhile, accounted for 28.5% of premium but declined 13.7%. Residential, homeowners and other personal property business grew 20.2%, although it still represented just 6.1% of the market.
The divergence shows how quickly opportunities can move as carrier appetite and capacity. Kelley pointed to homeowners’ insurance in catastrophe-exposed areas as one example. Capacity restrictions and tighter underwriting, particularly around wildfire-exposed California properties, have pushed risks toward E&S when admitted carriers become less willing to write them.
“When coverage terms and capacity are restricted, like homeowners have experienced in certain regions of the country, particularly the areas hardest hit by wildfires in California, standard market underwriters become more conservative in their scrutiny of loss exposures and rates, focus on risks they are most comfortable assuming, and avoid more complex or unfamiliar exposures,” Kelley said.
However, he expects some of that business to migrate back as admitted markets become more comfortable with the exposure. “We anticipate the E&S market is a short-term solution for more standard homeowner’s risks,” Kelley added.
Beyond property, Kelley highlighted auto liability, professional liability and inland marine as lines experiencing growth.
The common thread is specialization. Risks requiring underwriting flexibility, access to specialist capacity or more customized policy structures continue to provide fertile ground for wholesalers even as competition pushes rates down elsewhere, said Kelley. The role is becoming less about simply accessing capacity and more about navigating an increasingly fragmented specialty market.
“Wholesale brokers understand these unique risks thoroughly and know which markets have the appetite, capacity and expertise to address them,” Kelley said. “The opportunity isn't simply about finding capacity; it's about finding the right solution.”
Softer market conditions are also facilitating the need for this expertise. When capacity is abundant, retailers may have more options, but complex placements can also require a clearer understanding of which insurers are genuinely equipped to handle a particular exposure.
Asked whether retailers were demanding greater technical expertise from wholesale partners, Kelley said: “Absolutely, and we continue to believe that WSIA member wholesale, specialty and surplus lines professionals deliver exceptional expertise and solutions for complex risks. That need doesn’t change with market cycles.”
One challenge that does cut across market cycles is talent. Kelley identified recruitment and retention as continuing concerns for the insurance industry and a focus for WSIA as it seeks to broaden the pipeline of professionals entering wholesale, specialty and surplus lines. Talent is increasingly important as wholesalers contend with a growing need for technical expertise across increasingly specialized exposures.
Distribution costs are also expected to feature in discussions around WSIA’s Annual Marketplace. The association plans to release an updated study from Conning examining the cost of wholesale distribution. Previous Conning studies published in 2016 and 2021 found that using wholesale distribution did not increase the transaction cost to the insured.
“Retail agents can confidently recommend wholesale solutions knowing that their clients can purchase innovative, customized solutions for complex risks that are also cost-effective,” Kelley said. “We anticipate a 2026 update to that analysis will find the same.”
