Canadian commercial insurance prices in aggregate for the third quarter of 2015 have shown the first quarter of decrease since Q3 2011, according to the latest Willis Towers Watson (WTW) Commercial Lines Insurance Pricing Survey (CLIPS) – Canada.
“Commercial insurance prices in aggregate had been increasing marginally for the past three years,” Willis Towers Watson said in a statement on Thursday. “Although minimal, this quarter (Q3 2015), shows the first quarter of decrease since 2011 Q3.” The increases were highest in Q3 2014 at 3%. Since then, the “magnitude of the price level increase had been gradually decreasing,” WTW said.
The latest CLIPS survey compared prices charged on policies underwritten during the third quarter of 2015 to those charged for the same coverage during the same quarter in 2014, WTW noted in the statement. For the most recent survey, data was contributed by six Canadian insurers/groups, representing approximately 20% of the Canadian commercial insurance market. Once per quarter, participating companies provide premium volume, changes in prices for the latest quarter for each of the surveyed commercial lines of business they write, as well as their estimate of changes in loss costs for that business.
Price increases were reported for commercial auto, general products liability and excess umbrella liability. Survey respondents reported the largest price increases in the general product and liability line at 1.4%, followed by the commercial auto line at 1.1%. Commercial property, representing the largest volume reflected in the survey, showed a decrease of 0.3%, WTW said, adding that price changes for all lines were in the low- to mid-single digits.
Survey respondents also reported a 0.2% premium decrease during the third quarter of 2015.
Reported claim cost information revealed an improvement of 3.4% in loss ratios in accident year 2015 compared to the same period in 2014. “We note that as year-to-date survey results provide a preliminary perspective, a subset of the participants provide claims cost inflation and as claims results can be volatile, insurers will wish to review and monitor additional data as it becomes available,” the statement said.
Carrier estimates of the claim cost inflation underlying the loss ratio movement is -1.2% for accident year 2015.