Commercial Insurance Prices Rise 1% as Increases Continue to Moderate

ARLINGTON, Va.--()--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

be eliminated."


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