LowVII Reinsurance & Specialty Risk6 November 2026, Friday
US specialty risk premium growth slows to 2.8%
Direct premium growth in the US excess and surplus lines (E&S) market slowed to 2.8% year on year in the first half of 2026, according to an ALIRT Insurance Research report published on 6 November. In 2025 the market reached 143.3 billion dollars, or 12.9% of US property-casualty premium.
The E&S market is the specialty channel that covers risks standard insurers will not write or cannot price, without state rate approval. According to the ALIRT report cited by Reinsurance News, the market grew by roughly 187% during the 2018–2025 hard cycle. In the first half of 2026 growth fell to 2.8% a year, matching the pace of the wider US property-casualty market. ALIRT's 50-company composite wrote around 73 billion dollars of direct premium in 2025.
The report attributes the slowdown to three causes. Pricing is softening. Agency and fronting carriers, backed by private capital and alternative reinsurance, are growing fast. And admitted insurers are taking back risks they had previously left to the E&S market. Profitability has held up so far: pre-tax operating returns have stayed between 25% and 35% of earned premium over the past two and a half years. The composite's equity reached about 45 billion dollars on 30 June.
Stamping office data point the same way. Figures from the Wholesale & Specialty Insurance Association, reported by Business Insurance on 4 August, show first-half premium across 15 states rising 2.8% to 47.6 billion dollars, against 13.2% growth a year earlier. Property premium fell 13.7% to 13.6 billion dollars, while general liability premium rose 11.2% to 18.8 billion dollars. Transaction counts rose 16.9%.
Talay assessment
Bottom line
The US specialty risk channel has reached the end of its hard cycle. Property rates are falling while liability is still growing. Transaction counts rose 16.9% but premium grew only 2.8%, so the price per policy is declining. The most likely path is that E&S property premium keeps falling through the 1 January renewals, while the liability line holds its pricing.
Likely effects
- Property insurancePositiveWeeks
Cheaper reinsurance and returning admitted carriers are pushing E&S property premium down; it fell 13.7% in the first half.
- Liability lineNegative1–6 months
General liability premium grew 11.2%. In a line still under reserve pressure, softening will lag property.
- Specialty insurersNegative1–6 months
With growth back to the overall market pace, price competition between agency and fronting channels will intensify; operating returns of 25–35% are open to erosion.
Possibilities, ranked
- 1Property softens, liability holds60%
E&S property premium keeps falling, liability premium grows, and overall growth stays in single digits.
Watch: Year-end stamping office data from the Wholesale & Specialty Insurance Association
- 2Broad softening deepens25%
Liability pricing also eases, and total E&S premium ends 2026 flat or negative.
Watch: Whether 2026 E&S direct premium comes in below 143.3 billion dollars
- 3Re-hardening after a catastrophe15%
A major catastrophe or a liability reserve shock pushes risks back into the E&S channel.
Watch: A US catastrophe with insured losses above 30 billion dollars before the end of December
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- E&S premium growth (H1)▼ 2.8%
- E&S property premium (H1)▼ −13.7%
- E&S liability premium▲ +11.2%