All In on California: Inside the Structural Shift Reshaping the Surplus Lines Insurance Market

LOS ANGELES, Feb. 3, 2026 /PRNewswire/ -- California's surplus lines insurance market has entered a new phase—one defined not by short-term disruption but by permanent structural change—according to a new market analysis released by The Surplus Line Association of California (SLACAL).

The 2025 Annual Report, All In on California's Surplus Lines Market, examines how legal risk, catastrophe exposure, capital constraints and regulatory friction have reshaped where risk is placed and how coverage is accessed in the world's most complex surplus lines marketplace. Drawing on statewide policy data and executive-level insight, the analysis documents a sustained reallocation of risk from the standard market into surplus lines, marking a structural shift rather than a cyclical correction.

The report was released in conjunction with SLACAL's annual meeting, held Feb. 3, 2026, at the Biltmore Hotel in Los Angeles. For the first time in the organization's history, registration closed after reaching maximum capacity. Attendees included senior brokers, underwriters, compliance leaders and insurance executives representing major national and global firms across distribution, underwriting and specialty risk.

"California's insurance market didn't 'go crazy'—it evolved," said Benjamin J. McKay, CEO and executive director of SLACAL. "What the data shows is not volatility but structural redefinition. Growth at this scale doesn't retreat. It changes where responsibility, capital and decision-making now live."

Among the report's key findings:

• The standard market's pullback is no longer isolated to high-risk or rural regions but increasingly affects urban and suburban areas.
  
  
• Personal lines activity entering the surplus lines market reflects a systemic shift, not an anomaly.
  
  
• Nuclear verdicts and third-party litigation funding have become capacity-shaping forces, particularly in casualty and transportation.
  
  
• California now functions as a critical test case for how global capital responds to complex, regulated risk environments.

The report also includes an analysis of market concentration, including the top brokerages and insurer parent companies by premium, offering a clearer picture of how capital and distribution are aligning within California's surplus lines market.

The analysis positions California not simply as a participant in the global excess and surplus lines ecosystem but as a gravitational center driven by scale, complexity and demand for disciplined risk transfer.

The annual meeting also marked the start of a new board term, with SLACAL's Board of Directors aligned to guide the market through its next phase.

Board Leadership and Directors

Chair
John Washington, Senior Vice President, Arch Insurance Group

Vice Chair
Sarah Nichols, Senior Vice President, Crum & Forster Insurance Brokers, Inc.

Secretary/Treasurer
James Faley, Vice President, Vela Insurance Services, LLC

Past Chair
Rich Gobler, Executive Vice President, Burns & Wilcox

Board Members
Janet Beaver, Executive Vice President, Aurenity
Terri Moran, Chief Underwriting Officer, Paul Hanson Partners
Robert Gilbert, Managing Director, Excess Casualty, Markel West Insurance Services
Pamela Quilici, President, Ryan Specialty Transportation Underwriting Managers
Charlie Rosson, Regional Growth Leader, EPIC Insurance Brokers
Kristopher Bauer, President, Jencap Specialty
Jon Larson, Vice President, Casualty, Westchester
Charles Ford, Western Region Underwriting Manager, Sompo
John Fosdick, Office President, CRC Insurance Services

As the advisory organization appointed by the California Department of Insurance, The Surplus Line Association of California oversees the state's $20+ billion surplus lines marketplace, serving as a market stabilizer, information authority and early-warning system for regulators and market participants alike.

The full report, All In on California's Surplus Lines Market, is available by request. To receive a copy, visit www.slaannualreport.com/2025.

SOURCE The Surplus Line Association of California