The surplus lines market, a group of highly specialized insurers that includes Lloyd’s of London, exists to assume risks that licensed companies decline to insure or will only insure at a very high price, with many exclusions or with a very high deductible. To be eligible to seek coverage in the surplus lines market, a diligent effort must have been made to place insurance with an admitted company. This effort is, usually defined by a certain number of declinations (typically three to five), or rejections, by licensed insurers. Many states provide an export list of risks that can be insured in the surplus lines market. This obviates the diligent search requirement.
Lloyd’s market share of US Excess and Surplus Lines by direct premiums written was 16.0 percent in 2024 compared to 17.3 percent in 2023 according to AM Best.
Lloyd’s is not an individual insurer but a market of many risk bearers. According to the International Insurers Department (IID), 86 Lloyd’s syndicates were transacting surplus lines business in 2023. Premium totals for the Lloyd’s market reflect the activities of the 86 syndicates and should not be compared to the premiums of any one surplus lines group or company.
The terms commonly applied to insurers in the surplus lines market—non-admitted, unlicensed, and unauthorized—do not mean that states do not regulate surplus lines insurers or have prohibited these companies from selling insurance. These labels simply mean that the surplus lines insurers are subject to regulations different from those that apply to standard carriers. Regulation of this market is state-based, with the insurer’s home state overseeing the insurer’s solvency. More than half of all states maintain a list of eligible surplus lines insurers, and some states also keep a list of companies that are not eligible to do business in that state.
(1) Excludes Lloyd’s of London and territories.
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.
