U.S. surplus lines remain solid despite soft market.

U.S. insurers' surplus lines maintained adequate pricing in 2006, aided by the fact that catastrophe-exposed coastal property remained a notable exception to the property/casualty market's softening rates. The findings are in A.M. Best's 2007 Special Report, Surplus Lines Insurers Weather Soft Market with Profits Intact. A.M. Best expects continued positive underwriting returns for surplus lines.

U.S. Surplus Lines--Top 10 Groups (2006)
Ranked by 2006 direct premiums written
($ Thousands)

                                           Direct   Total Surplus
                                         Premiums    Lines Market
Rank   Group Name                         Written           Share

1      American International Group    $8,164,885           21.1%
2      Lloyd's                          5,989,000           15.5%
3      Zurich Financial Svcs. Group     1,638,125            4.2%
4      Nationwide Group                 1,508,253            3.9%
5      ACE INA Group                    1,507,966            3.9%
6      W.R. Berkley Group               1,288,056            3.3%
7      Markel Corporation Group         1,269,918            3.3%
8      Berkshire Hathaway Ins. Group    1,128,902            2.9%
9      Alleghany Insurance Holdings     1,004,112            2.6%
10     CNA Insurance Companies            837,557            2.2%

                                       Policyholder
Rank   Group Name                           Surplus

1      American International Group     $27,002,503
2      Lloyd's                           26,107,000
3      Zurich Financial Svcs. Group       6,239,445
4      Nationwide Group                  12,848,181
5      ACE INA Group                      4,420,165
6      W.R. Berkley Group                 3,535,243
7      Markel Corporation Group           1,419,283
8      Berkshire Hathaway Ins. Group     59,396,009
9      Alleghany Insurance Holdings       1,319,111
10     CNA Insurance Companies            8,161,926

Source: A.M. Best Co.

U.S. Surplus Lines--Market Composite
(1988-2006)

A comparison of the growth in direct premium written of the different
components of the surplus lines industry.
($ Millions)

                       Regulated                              Total
        Domestic   Aliens (excl.                 Domestic   Surplus
Year   Specialty        Lloyd's)   Lloyd's   Professional     Lines

1988        $328          $1,012    $1,237         $3,704    $6,281
1989         361           1,050     1,182          3,530     6,123
1990         396           1,013     1,241          3,882     6,532
1991         410           1,111     1,322          4,081     6,924
1992         450           1,220     1,388          4,491     7,549
1993         456           1,183     1,631          5,270     8,540
1994         509             992     1,196          6,089     8,786
1995         412           1,022     1,300          6,511     9,245
1996         365             818     1,354          6,668     9,205
1997         439             802     1,609          6,569     9,419
1998         328           1,196     1,574          6,763     9,861
1999         298           1,140     1,912          7,275    10,625
2000         332             941     2,499          7,884    11,656
2001         310           1,237     3,368         10,773    15,688
2002         311           1,600     4,082         19,572    25,565
2003         245           2,400     4,492         25,662    32,799
2004         272           2,400     4,596         25,744    33,012
2005         238           2,400     4,675         25,988    33,281
2006         199           3,100     5,989         29,410    38,698

Source: A.M. Best Co.