Wholesale Insurers Kept Costs Lower Than Retail Rivals
A long-term study shows how wholesale insurance structures maintained lower non-loss costs for policyholders between 2010 and 2025.
Updated on Oct. 13, 2026 in Commercial
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A Conning, Inc. study analyzing 272 insurance companies found that wholesale-focused insurers maintained lower non-loss cost ratios than their retail counterparts from 2010 to 2025. This cost advantage, which averaged 1.4 percentage points from 2021 to 2025, reflects fundamental differences in how these two insurance channels operate.
Why it matters
The cost disparity is primarily driven by lower non-commission expenses within the wholesale market, specifically tied to differences in premium tax structures. Understanding these efficiencies helps homeowners and businesses assess why premium rates and cost structures can vary significantly between standard and surplus lines policies.
Wholesale insurers held a 3.7 percentage point advantage in non-commission expenses, while wholesale commission ratios were 2.7 percentage points higher than retail counterparts. The surplus lines market concluded 2025 with $143.3 billion in direct premiums written.
The players
Conning, Inc.
An investment management and research firm known for its analysis of insurance industry statutory financial filings.
The details
Conning analyzed statutory financial filings from 107 wholesale and 165 retail insurers to compare operating efficiencies. The analysis utilized median measurements to account for varying company sizes and mitigate statistical outliers. The wholesale market often leverages surplus lines, where lower tax structures on policies compared to admitted, retail-focused insurance contribute to lower overall non-loss costs.
Timeline
The study analyzed industry financial data from 2010 through 2025.
The primary comparative analysis covered the five-year period from 2021 to 2025.
Wholesale insurers reached their peak cost advantage of 2.2 percentage points in 2022.
The wholesale cost advantage narrowed to 1.1 percentage points in 2025.
The Home Front
The surplus lines market grew by 10.4% in 2025, reaching $143.3 billion in total direct premiums written. This trend highlights the increasing reliance on wholesale channels for specialized liability coverage compared to traditional retail insurance markets.
Homeowners and business owners should review their insurance declarations pages to see if their coverage is sourced through an admitted carrier or the surplus lines market. If you are shopping for new coverage, ask your broker to explain the specific tax and fee differences that may apply to your policy type.
The takeaway
Wholesale insurance structures offer distinct cost efficiencies compared to retail models due to differing premium tax frameworks. Consumers should verify if their coverage includes liability components, which represent 54% of wholesale premiums compared to 31% for retail policies.
Further reading
For more on industry trends affecting property and liability coverage, visit our Commercial section.
Source note: This article includes information reported by Insurance Business.
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