2026 RT Personal Lines Market Update

The personal lines segment of the excess & surplus (E&S) market continues to expand, driven by elevated catastrophe exposure, volatility in admitted markets, rising property replacement costs, and persistent underwriting tightening by standard carriers. Surplus lines personal lines growth rate is outpacing many commercial lines and remains structurally important in solving access-to-coverage challenges. 

Market Share and Growth 
U.S. surplus lines premiums reached $81+ billion in 2024, up 12.1% from 2023, with nearly 7 million transactions filed. Personal lines (homeowners and other residential property) represented just 4.9%, but grew rapidly, particularly in catastrophe-exposed states. Additional data from 15 state stamping offices shows 13.2% premium growth and 12.4% more filings for the first half of 2025, with homeowners and personal property continuing to shift into E&S markets as admitted carriers restrict capacity. Admitted market dislocation, particularly in California, Florida, Texas, and coastal zones, continues to push homeowners coverage to surplus lines markets. Nationwide residential/personal property submissions have risen sharply, with states like Texas (+63.3%) and California (+60.9%) experiencing the largest increases. The data clearly points towards a growing surplus lines personal lines marketplace creating an increased need for retail agents to utilize surplus lines brokers and carriers to find solutions for their clients.  

Current Market Conditions

After multiple years of a hardening market coastal property rates have stabilized and even decreased at the end of 2025 and into 2026. Wind deductibles have also been under pressure, although most carriers are holding the line, favoring rate reduction vs. changing of terms gained or held during the hard market cycle. More competition, increased reinsurance stability and additional capacity entering the marketplace are all drivers of the softening market. At the same time the overall market is softening, E & S Homeowners volume is increasing according to AM best based on the following factors:  

• Volatility in catastrophe losses,
• Reconstruction costs,
• Supply chain challenges,
• Admitted carriers tightening guidelines

Further comments on the softening yet growing surplus lines market from AM Best include the following:
AM Best (Nov 2025) revised its outlook for the E&S segment to stable, noting: 

• Slowing premium growth,
• Early signs of rate softening,
• And more selective deployment of capacity.
• Despite this, tailored surplus lines solutions remain in high demand

 Submission activity remains strong and complete submissions that include target terms and premium are getting the quickest attention. Personal Lines E & S carriers are hungry for business and eager to hit targets especially on high value and high net worth business. 

AI Adoption

Surplus lines carriers like Markel and Nationwide E & S are utilizing AI for risk and submissions intake to gain efficiency in a myriad of ways including summarizing risk characteristics and exposures, flagging missing information and routing risks to the proper underwriter.

Using AI helps speed up the process of declination vs. considering risks and determining if an underwriter has the proper information to do their job. Wholesale brokers need quick declinations and or requests for additional information. Underwriters spend valuable time sifting through submissions and reaching out for proper information; reducing time spent in this step allows them to quote more viable risks increasing submission to quote metrics which likely leads to an increase in quote to bind ratio.

It is very important to understand that AI in E&S is augmenting, not replacing, underwriting judgment. Further, personal lines E&S providers can benefit disproportionately due to volume surges from admitted market exits and repetitive but non‑standard risks (coastal HO, umbrella). The largest current AI return on investment today is submission intake and triage, broker placement and efficiency, and climate and portfolio analysis.

Surplus lines carriers and brokers alike will clearly benefit from AI adoption, and these benefits should translate to retail agents and their clients as well. Carriers and brokers will be able to review more submissions and respond quicker. Capital providers should be able to improve book analysis providing competitive capacity for coastal, and other difficult to place risks in catastrophic weather prone areas. Relationships between carriers and brokers and in turn brokers and retailers may become stronger because of AI vs. traditional thoughts of AI replacing people and relationships. This is simply put, good news!

2026 Outlook

The personal lines surplus lines market growth is predicted to moderate but continue to be strong. AM Best and Swiss Re both indicate that although premium growth is slowing from peak levels (from ~17% in 2023 to single‑digit growth by late 2025), the market remains fundamentally strong with sustained demand for specialized coverage. Fitch and Insurance Journal project that personal lines combined ratios reached historically favorable levels in 2025 (e.g., 84 in Q3 2025), though catastrophe normalization may weaken results in 2026. Increased reporting and collateral requirements for carriers (especially those fronting or writing delegated-authority programs) are expected to continue, affecting speed-to-market and operating costs.

The personal lines surplus lines market enters 2026 in a position of relative stability and continued opportunity, fueled by:

• Structural demand from catastrophe‑exposed homeowners and insureds with loss histories
• Admitted market retrenchment in key states
• Improving auto profitability, but still challenged umbrella exposures
• Expanding MGA and specialty-carrier ecosystems
• Softening property rates but continued underwriting discipline

While growth is slowing from its record-setting 2018–2023 trajectory, the personal lines E&S sector remains a critical pressure‑release valve for the U.S. insurance system and is likely to remain a strong performer through 2026.

RT Personal Lines is a growing division of RT Binding Authority. Our experienced underwriters and leaders are poised to assist retail customers by meeting you where you want to be met! From robust online offerings to responsive underwriting teams, RT Personal lines teams are switched on and ready to provide solutions for your client’s insurance problems. As the surplus lines market continues to gain market share a solid relationship between a broker and a retailer is more important than ever. Reach out and experience the RT Specialty difference today!

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