Commercial Insurance Prices Rise 1% as Increases Continue to Moderate
ARLINGTON, Va.--(BUSINESS WIRE)--Commercial insurance prices increased in aggregate at a modest pace (1%)
during the second quarter of 2015, continuing a trend of ever smaller
increases, according to the latest Commercial Lines Insurance Pricing
Survey (CLIPS) conducted by global professional services company Towers
Watson (NASDAQ: TW). This survey compared prices charged on policies
underwritten during the second quarter of 2015 to those charged for the
same coverage during the same quarter of 2014.
Price increases for most lines surveyed were in the low single digits,
having moderated further during the second quarter. Directors and
officers, and commercial property reported small price decreases, while
workers compensation pricing was nearly flat; in fact, results show a
very slight decrease. Commercial auto showed the largest increases,
followed by employment practice liability. Price increases for small and
mid-market accounts continued, also following a moderating trend, and
prices for large accounts declined slightly.
Carriers reported an improvement of 1% in loss ratios in
accident-year-to-date 2015 relative to the same period in 2014, as
earned price increases offset low claim cost inflation reported for many
lines. This compares to flat loss ratio movement indicated between 2013
and 2014, though loss ratios for 2015 are still developing.
"Price increases continue their downward trend, as strong underwriting
results allow for some room in pricing," said Alejandra Nolibos, a
director with Towers Watson's Property & Casualty Insurance practice.
"However, there are indications that workers compensation pricing may
have moved into negative territory for the first time since 2010 and
that pricing is also down for large accounts -- a segment that is
typically quick to be affected by competition. Should the benign loss
trends that have marked the last several years return to longer-term
levels, some of the recent underwriting success in long-tailed lines may
CLIPS data are based on both new and renewal business figures obtained
directly from carriers underwriting the business. CLIPS participants
represent a cross section of U.S. property & casualty insurers that
includes many of the top 10 commercial lines companies and the top 25
insurance groups in the U.S. This particular survey compared prices
charged on policies underwritten during the second quarter of 2015 to
the prices charged for the same coverage during the same quarter of
2014. For the most recent survey, data were contributed by 43
participating insurers representing approximately 20% of the U.S.
commercial insurance market (excluding state workers compensation funds).
About Towers Watson
Towers Watson (NASDAQ: TW) is a leading global professional services
company that helps organizations improve performance through effective
people, risk and financial management. With 16,000 associates around the
world, the company offers consulting, technology and solutions in the
areas of benefits, talent management, rewards, and risk and capital
management. Learn more at towerswatson.com.