AM Best is maintaining its market segment outlook for the delegated underwriting authority enterprise (DUAE) segment at stable, citing an anticipated moderation in premium growth amid more disciplined expansion efforts.

The DUAE market posted its fifth consecutive year of double-digit premium growth, outpacing the broader U.S. property-casualty industry. However, that pace is expected to temper as regulators and capacity providers place greater emphasis on long term underwriting quality, transparency, and loss ratio stability rather than short term premium growth.

According to the Best’s Market Segment Report, “Market Segment Outlook: Delegated Underwriting Authority Enterprises,” the segment continues to serve as a strategic partner for capacity providers, spanning multiple lines, industries, and geographies. While regulators have typically considered capacity providers to be responsible for customer outcomes, compliance and risk management, the broader view on oversight is evolving as DUAEs enter new markets and territories.

“The regulatory environment is moving toward stronger governance practices, as well as deeper scrutiny of DUAEs as the segment has faced criticism in the past,” said Jacqalene Lentz, senior director, AM Best. “Stricter governance and audit requirements are becoming standard, as carriers intensify their reviews of underwriting authority, claims handling and data integrity.”

The market segment outlook also notes that competition in the DUAE segment is intensifying as the market matures and carrier become more selective when deploying capacity. Innovation and technological advancements have created new products and improved data analytics for new DUAE ventures, which the market has supported. Moreover, alternative capital and insurance-linked securities (ILS) are increasingly entering the space, often seeking diversified noncorrelated risk through quota share treaties or fronting arrangements.

“The result is a blended capacity environment where capacity provider balance sheets provide support while other alternative capital sources add flexibility, speed, and appetite for emerging or specialty risk,” Lentz said.

Broader market forces are having an impact on the DUAE environment, adding complexity to carrier and reinsurer decision making. Economic and political uncertainty is shaping capacity deployment and risk appetite, while casualty portfolios remain under pressure from social inflation and rising loss costs, according to the report.

To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=370508.

AM Best analysts will present the credit rating agency’s 2027 outlook on the DUAE segment at a briefing scheduled for Monday, Nov. 16, 2025, from 2:30–6:00 p.m. EST at Kimpton Hotel Eventi, 851 Sixth Avenue in New York City. A networking reception will follow the event. For more information, click here.

To view all Best’s Market Segment Outlooks, please visit http://www.ambest.com/ratings/RatingOutlook.asp.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2026 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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