E&S traces anticipated to be sturdy this yr: Fitch – Enterprise Insurance

Surplus and surplus lines are expected to have a strong 2021 after a challenging year in 2020, Fitch Ratings Inc. said in a report on Tuesday.

Surplus and surplus lines "fared significantly worse" than the broader property-casualty market in 2020, reporting a combined ratio of 107% compared to breakeven results in 2019, the report said.

However, barring major catastrophe losses, the sector's underwriting performance is expected to "improve significantly in 2021, with successive rounds of renewals and stricter terms and conditions moderately offset by higher ceded reinsurance costs," the US Excess and Surplus Lines market report said.

"Performance changes at E&S should outperform standard improvements in the P / C market over the next two to three years," the report said.

According to the report, the E&S market grew to nearly 7% of the total U.S. property / casualty insurance industry over the past year, compared to roughly 5% over the past decade as approved markets continued to degrade unprofitable, volatile business.

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