Article ID: 4bb58ba90b7e31efd319914a17cfa90bba26af9accb7a83e31decbd930082f06
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URL: https://www.theinsurer.com/ti/viewpoint/the-rapidly-growing-es-casualty-marketplace-2026-01-29/
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The rapidly growing E&S casualty marketplace | The Insurer The Insurer from Reuters The Insurer The Insurer TV Cyber Risk Sustainable Program Manager E&S Parametric Data Hub Sign in Subscribe Articles Region London Market Europe US / Americas Bermuda Asia Pacific Topics Broking Casualty Cyber ILS InsurTech and innovation Legacy Legal/ Regulatory Lloyd’s Losses M&A Parametric People Moves Property catastrophe Results Specialty Events & Conferences Events Content Types News Analysis Viewpoint Commentary Interview News Analysis Commentary Viewpoint Interview Events Videos The rapidly growing E&S casualty marketplace By Tiffany Fann Published: Thu 29 Jan 2026 The Insurer news staff had no role in the production of this content. This content is created by the brand marketing unit of The Insurer. As the world becomes riskier, the E&S insurance market continues to grow. According to the surplus lines stamping offices, overall E&S premiums increased by 11% in the 12 months ended September 2025. The pace of growth in the E&S market moderated in 2025 due to the slowing property market. However, the casualty market continues to see a substantial inflow of submissions and significant overall growth in gross written premium. For Zurich E&S Casualty, this growth translates into significant double-digit increases in submissions, policy count and premium. What is driving this growth? To understand the forces at work, we identify three major drivers of the current growth in E&S casualty: The need for additional limit capacity New business opportunities fueled by a changing marketplace The need to leverage the freedom of rate and form provided by the E&S market to protect customers in an increasingly litigious environment The retail market is lowering the overall limit carriers deploy on any risk or tower. Estimates show that retail capacity has fallen by 10% to 15% on excess casualty limits over the past 12 months. As a result, more limit requests now flow into the E&S market, creating opportunities to deploy limits for relatively standard risks. Hospitality and real estate, considered standard risks, are particularly affected by these capacity reductions, highlighting the importance of E&S carriers in covering the gap and managing exposures such as assault and battery, human trafficking and liquor liability. Turning to the second driver, the U.S. market continues to experience heightened levels of disruption. The market is experiencing shifts in labor supply, frequency changes in supply chains, new technologies and business models, and a spike in new business opportunities (e.g., startups and new data center construction). Given the nature of these new business opportunities and the rapidity with which the insured's business model can change, the E&S market, with its embedded flexibility and capacity to design tailored coverage solutions, is a natural home for these businesses, at least until the insured’s business model reaches a certain level of maturity. The faster the pace of change, the greater the opportunities in E&S. Capitalizing on these opportunities, non-admitted carriers like Zurich E&S Casualty continue to revise appetites to attract both lead and high-excess placements, lower minimum premium accounts as well as lower middle-market exposures. Consequently, these appetite revisions have significantly increased submission volume, forcing carriers to invest in technological advancements (such as autonomous submission ingestion) and to incorporate third-party data directly into underwriting platforms, improving speed to market and enhancing the underwriting process with more precise risk assessments. Finally, a critical contributor to the increasing market in E&S casualty is rising claims costs. This factor also underpins the reduction in limits deployed by retail. While all carriers can manage rising claims costs driven by general inflation and increased frequency, the significant increase in litigation abuse (e.g., forum shopping, third-party litigation funding) has been especially challenging. The costs of litigation abuse have been well documented. For instance, by one estimate, the rate of claims cost inflation on bodily injury and property damage claims over the past 10 years has averaged 4% above the general rate of inflation. This increase correlates with a significant increase in both litigation trends and nuclear verdicts. A study by the Insurance Information Institute and Munich Re estimated that overall excessive litigation trends in the U.S. result in $6,664 in added annual costs for a family of four in America, 4.8 million jobs lost in the U.S. economy and over $160 billion in annual tort costs for small businesses. In a recent study, EY focused specifically on third-party litigation funding and estimated that the direct impact of third-party litigation abuse could be as high as $25 billion per year, with indirect costs increasing the total to $50 billion per year. These figures demonstrate that litigation abuse is a significant and growing tax on our customers. Like any "tax", any solution will require legislative action at the state and federal levels. In the interim, however, strong E&S carriers bring a unique blend of product, claims expertise and the resources to help our customers navigate these risks. For example, E&S carriers can leverage the freedom of rate and form to design coverage solutions that meet the insured's needs while minimizing coverage triggers that may give rise to spurious litigation or attract unaffiliated interest. Moreover, strong E&S carriers have the claims expertise to help customers manage litigation risks by proactively investigating claims and navigating coverage terms, complex law and regulations to achieve early resolution. Furthermore, large E&S carriers possess the balance sheet and resources to stand behind their customers when claims become challenging. The distinctive combination of features helps to explain the flow of good primary and excess casualty opportunities to well-established E&S markets. At Zurich E&S Casualty, thanks to our specialized claims expertise, we can assign each claim to the claim professional best equipped to navigate its unique circumstances, offering a tailored approach for our customers. The E&S casualty market will continue to play a unique and critical role in the insurance industry landscape, which makes the future not just vibrant but also exciting. New and emerging exposures coupled with an evolving litigation environment will continue to force admitted markets to evaluate how much capacity they will deploy, keeping the funnel of submission activity into the E&S distribution channel high for the foreseeable future. The E&S market thrives on the creative minds and entrepreneurial spirits of seasoned underwriting talent who think outside the box to address the complexities each risk presents. These underwriters work closely with their claims counterparts who share insights around high-risk exposures and explore targeted underwriting actions. Large E&S casualty carriers with strong balance sheets, experienced claims staff and internal resources will continue to lead the effort by remaining agile and taking the necessary steps to position their go-forward portfolios for long-term profitability. Tiffany Fann is head of E&S casualty at Zurich E&S E&S Casualty Most read articles US P&C underwriting peaks in 2025, outlook softens for 2026 Marsh beats Q4 earnings consensus, reports 4% underlying growth Howden US CEO says consolidation hollowed out broking, as platform converts hiring push into client wins Gallagher reports 5% organic growth in Q4 Axis sees ‘changing,' not soft, market as casualty, cyber discipline holds into 2026 Marsh: Property drives global commercial insurance rates down 4% in Q4
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