Conning Research: Property-Casualty Surplus Lines of Insurance Outperforming General Commercial Insurance Market

Hartford, CT, September 4, 2007 – Property-casualty surplus lines have outperformed the general commercial property-casualty insurance market in both premium growth and underwriting profit, according to a new study by Conning Research and Consulting, Inc.

�The surplus lines market has outperformed general commercial lines over the past ten years. In fact, through 2006 the surplus lines market ten-year average annual direct premium growth was 19.5 percent versus just 7.6 percent for total commercial lines,� said Clint Harris, analyst at Conning Research & Consulting. �It�s not just about premium growth, however. For the same period, the annual average combined ratio was 104.4 percent on a calendar-year basis for surplus lines and 107.1percent for total commercial lines.�

The Conning Research study, �Property-Casualty Surplus Lines: Profiting from the Right Strategy�identifies the detailed trends in underwriting results by major line of business, comparing peer groups of non-admitted insurers and the admitted market. While focusing on the surplus lines portion of the non-admitted market, the study explores the impacts and potential impacts from changes in regulation, catastrophes, and reinsurance support. The study goes on to examine the influence of emerging risks and new technologically supported processes.

�Surplus lines market share will likely decrease over the next two years due to the impact of soft market underwriting conditions, unless there is an unexpected event to cause standard insurers to withdraw from the general market. At the same time, loss ratios are likely to deteriorate more rapidly in surplus lines markets than in the general commercial market,� said Stephan Christiansen, director of research at Conning Research. �Yet our analysis suggests that companies that have established and well maintained surplus lines infrastructure and reinsurer and distribution relationships will be positioned well to outperform again in the next strong market.�

Conning’s “Property-Casualty Surplus Lines: Profiting from the Right Strategy” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company�s web site at

About Conning Research & Consulting, Inc.

Conning provides insurance industry analysis to insurers and industry stakeholders. The Conning name has represented excellence in independent insurance industry research for 50 years. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth insights and analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT.