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Berkshire grew US E&S premiums 20.4% in 2015

continued to lose market share in the U.S. excess and surplus market in 2015,as two other top 10 players, W. R.Berkley Corp. and Berkshire Hathaway Inc., grew their slices of the pie.

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AIG'sflagship E&S subsidiary in the U.S. is Lexington Insurance Co., which accounted for about 80%of its total E&S direct premiums written in 2015. Lexington wrote about1.5% fewer U.S. E&S premiums in the year, with notable pullbacks inIllinois and New Jersey, where premiums declined 12.6% and 12.7%, respectively.While these were not the largest dips on a percentage basis, those two statesare important ones for Lexington. In 2015, they were its fifth- and seventh-largestmarkets, respectively.

BerkshireHathaway's growth has been well-documented since the of Berkshire HathawaySpecialty Insurance in 2013, a division that focuses on large-scale insurancesolutions for commercial P&C risks. From the beginning, Berkshire HathawaySpecialty Insurance has been led by Peter Eastwood, formerly head of AIG'sproperty and casualty operations. Berkshire Hathaway Chairman, President andCEO Warren Buffett considers this a "home run," writing in his 2015annual letter that"[Berkshire Hathaway Specialty Insurance] has already developed $1 billion of annual premium volumeand, under Peter's direction, is destined to become one of the world's leadingP/C insurers."

Asin years past, the U.S. E&S market continues to see M&A activity. Inmid-March, The Hartford FinancialServices Group Inc. agreed to purchase Northern Homelands Co., the of Maxum SpecialtyInsurance Group, for $170 million in cash. Maxum Specialty had reportedly beenon the block sinceDecember 2015, according to a report in TheInsurance Insider.

Morerecently, rumors have surfaced that Ironshore Inc. might be again up for sale, less than ayear after Fosun InternationalHoldings Ltd. announced a deal to buy the remaining 80% of the company it did notalready own. Fosun is also considering an IPO of Ironshore, according to The Insurance Insider, which the news April 12.

BothIronshore and Maxum popped up on a list that S&P Global Market Intelligence compiled in2013, which showed writers with a heavy focus on E&S. Since that time,several companies on the list have sold.

But M&A is not the only way into the market. has created anew E&S writer known as Watford Specialty Insurance Co., according to an April 4article in the Insurance Journal.Arch Capital GroupLtd. and Highbridge Principal Strategies, familiar businesspartners of Watford Re, are involved in the new venture, the publicationreported. Arch Capital Group has invested $100 million in the common shares ofWatford Holdings Ltd., the parent of Watford Re, and substantially all ofWatford Re's investments are managed by Highbridge, a unit of

In addition to premiums written by U.S.-based subsidiaries,insurers can also write on a nonadmitted basis in the U.S. via the Lloyd'smarket. XL Group Plcnow has a large Lloyd's presence, following its purchase of in 2015. TheseCatlin syndicates wrote at least $868.4 million in the U.S. market, afterconverting to U.S. dollars. But it is difficult to say the exact amount, as dataon U.S. premiums is not available for all of its syndicates.

S&P Global Market Intelligence also recently compiledrankings of thelargest Lloyd's insurers, which illustrate the position that XL Group commandsin the market.

 

Click here for a template showing E&S market share for P&C groups and individual companies, with separate tabs for all 50 U.S. states.

 

If you are interested in a webinar discussing the E&S market and SNL's tools, click here.