September Across the Big 4: Texas Just Posted Its First Flat Month. California Is About to Flip Positive

Nine months into 2026, the four states that publish monthly surplus lines data have combined for $54.1 billion in premium. This month, the two most interesting stories are happening in the states that rarely generate headlines together: Texas just posted its first month without year-over-year growth, and California's year-long deficit has nearly disappeared. The September Equation Here's what September looked like across the four states that publish monthly: California: $17.92B through September. Down just 0.5% YTD. September alone was +2% over September 2025. Average policy size: $11,666, down 18.4% year-over-year. Texas: $14.67B through September. Up 5.8% YTD. But September was flat: $1.34B, essentially 0% growth over September 2025. First month without growth this year. Florida: $13.24B through September. Down approximately 5.6% YTD. 1.38 million policies. Still property-dominant, still softening. New York: $8.29B through September. Up 4.8% YTD. Average policy of $18,309, down 2.9% from last year. 453,000 transactions, up 7.9%. Combined across their latest reports: $54.1B. On pace for roughly $72B across just these four states. For context, the WSIA reported $47.6B across all 15 stamping office states in H1 2026, and the total U.S. surplus lines market is on pace to exceed $143 billion for the full year, commanding roughly 27.5% of total commercial P&C premium. Texas came in at $1.34B for September, essentially flat against September 2025. That's worth paying attention to because Texas hasn't posted a flat or negative month all year. January through August, every month showed growth. September broke the streak. YTD growth is still 5.8%, and at $14.67B through nine months, Texas is on pace for roughly $19.5B for the full year. That would still be a record. But the trajectory matters more than the total. Here's the equation: 5.8% YTD growth + first flat month in September = growth is decelerating, not reversing. Texas is still a property-base market where liability is the growth engine. Commercial property remains the dominant coverage by a wide margin. Liability growth is present, but it is building on top of a property base. The September flat print likely reflects what Marsh's Q3 Global Insurance Market Index confirmed nationally: property rates fell 10% in Q3, the largest decline in seven years. That pressure hits Texas's property base first. The liability side tells a different story. Excess casualty rates increased 13% nationally in Q3 per the same Marsh report, which is the highest since Q2 2022. Texas's liability growth has been absorbing some of the property softening all year. September may be the month where the property decline caught up. At $14.67B, Texas leads Florida by $1.43 billion. In July the gap was about $940 million. In August it was $1.15 billion. California's September was $2.04B, up 2% over September 2025. That's the fourth positive month out of the last five (June +7%, July +3%, August +19%, September +2%). Only one negative month in that stretch. The YTD deficit is now -0.5%, down from -3% at the start of summer. The equation from August still applies, and the numbers make it even clearer: Premium up 2% + average policy size down 18.4% = the number of policies is growing much faster than premium suggests. The average surplus lines policy in California costs $11,666 this year, compared to roughly $14,300 over the same period last year. Each policy generates less revenue, but there are dramatically more of them. This is not a rate-driven recovery. This is volume-driven growth overcoming rate decline. SLACAL's characterization of this as a "permanent shift" from admitted to surplus continues to hold. The admitted market's pullback from California risk, particularly wildfire-exposed property and habitational lines, is pushing more business into the E&S channel. The result is a market that looks flat at the top line but is fundamentally restructuring underneath. If October or November comes in positive, California's full-year number flips from red to black. Given the last five months, that looks more likely than not. Florida at $13.24B YTD continues running about 5.6% below the same period last year. 1.38 million policies. Average policy size of approximately $9,600, down from roughly $10,200 a year ago. The equation from July and August remains unchanged: 57% property composition + national property rate softening + steady transaction volume = declining premium on consistent policy count. Nothing in September changes this. Florida is not losing business. It's repricing the business it has. Verisk's latest property analysis confirms that national commercial property rates are in their most sustained softening cycle since 2017, and Florida, with the highest property concentration of any Big 4 state, absorbs that pressure more directly than any other market. Florida's transaction count is holding. The policies are still there. When property rates stabilize (Lockton's Q3 report suggests early 2027 as the likely inflection), Florida's premium should follow. Until then, the -5.6% print is all about rate. New York through September: $8.29B, up 4.8% year-over-year. 453,000 transactions, up 7.9%. Average policy size of $18,309, down 2.9% from last year. New York's average policy continues to dwarf the other three states. At $18,309, a single New York surplus lines policy generates nearly double the premium of a California policy ($11,666) and almost twice a Florida policy ($9,600). New York is a liability-dominant market where excess and umbrella, D&O, and professional lines drive the mix, which can be larger by nature. The 7.9% growth in transactions is outpacing the 4.8% premium growth, which tells you that the average policy size compression is real but mild compared to California's 18.4% decline. Here's the equation: Transactions up 7.9% + premium up 4.8% = average policy size down 2.9%. Liability rates are holding or firming, per Marsh's Q3 data showing excess casualty at +13%. New York's liability-heavy book benefits from that. Industry Context We added two external data points this month to help with the framing: Marsh's Q3 Global Insurance Market Index shows property rates down 10%, the steepest quarterly decline in seven years. Excess casualty is up 13%, the highest since Q2 2022. That divergence, property softening while casualty hardens, explains why states with higher property composition (Florida, and to a lesser extent Texas) are feeling more pressure than states with liability-heavy books (New York). Lockton's Q3 Market Update reinforces the same theme: competition is driving rates down, while casualty markets are tightening, particularly in excess layers and auto liability. The surplus lines market is moving in two directions, and where a state falls depends on its composition. For the full year, the U.S. surplus lines market is projected to exceed $143 billion, holding roughly 27.5% of total commercial P&C premium. The long-term structural shift from admitted to surplus continues to be the dominant theme in commercial insurance, and it's visible in every state's numbers, even where the top line is negative. What This Means for You If you're a California broker: Four positive months out of five. The market is growing in volume even as rates compress. Production metrics that reward policy count over premium volume are going to be aligned with the market direction. If you're a carrier in Texas: The property softening was always going to compress growth eventually. The question is whether your casualty book is large enough to offset it. If you're in Florida: the equation hasn't changed. Transactions are holding, premium is declining on rate. If you're watching New York: Liability-heavy books are better positioned in this cycle. The excess casualty gives New York a leg up that the property-dominated states don't have. Data sourced from SLACAL, SLTX, FSLSO, and ELANY. External market data from Marsh Q3 Global Insurance Market Index and Lockton Q3 Market Update. National market figures from WSIA. Full state-level detail at surpluslinesreporting.org. — Nourse Fox, 10.21.26