Canadian Underwriter
News

Commercial insurance prices in U.S. remain flat during 2016 Q4


March 13, 2017   by Canadian Underwriter


Print this page Share

Commercial insurance prices in the United States were almost flat during 2016 Q4, with price increases of less than 1% for the fifth straight quarter, Willis Towers Watson (WTW) reports in its latest Commercial Lines Insurance Pricing Survey (CLIPS).

CLIPS compared commercial insurance prices charged on policies written during the 2016 Q4 to those charged for the same coverage during the equivalent quarter in 2015, notes a WTW statement Monday.

Most price changes were comparable with those reported in the third quarter of 2016, the statement points out.

“Price changes reported by carriers were less than 1% for the fifth consecutive quarter, following a moderating trend in price increases that began in the first quarter of 2013,” a survey abstract explains.

Related: Willis Towers Watson reports ‘meaningful’ price hike in commercial auto, modest price drops in other lines

Workers’ compensation and commercial property data indicates modest price decreases, WTW reports, while directors and officers data “continued to suggest more significant, albeit moderating, price reductions.”

Compare that to commercial auto, which, once again, “experienced meaningful price increases,” survey figures show.

“For most other lines, price increases were in the low single digits. Price changes were fairly similar across segments, though slightly negative for large accounts and marginally positive for small and mid-market ones,” the statement continues.

“Specialty account price changes in aggregate were, again, slightly negative,” the abstract notes.

“Historical claim cost information reported by participating carriers points to a loss ratio improvement of 2% in 2015, and flat loss ratios in 2016, as tapering earned price increases still offset modest claim cost inflation reported for many lines,” the abstract notes.

Alejandra Nolibos, director in WTW’s Americas Property & Casualty Insurance practice, points out “the rapid growth in the rate of price increases seen in 2012 has since slowed for much of the commercial market, but not for commercial auto.”

With regard to the latter, Nolibos says its “cumulative price increase since 2012 is over 25%, compared to about 10% for the surveyed commercial market as a whole.”

The dynamics of the auto business are “changing quickly and dramatically, ultimately driving challenging results and rate need for the line,” Nolibos adds.

CLIPS data – participants represent a cross section of U.S. property and casualty insurers that includes many of the top 10 commercial insurance lines companies and the top 25 insurance groups in the U.S. – are based on both new and renewal business figures obtained directly from carriers underwriting the business, the statement notes.

The current survey reflects data from 42 participating insurers representing about 20% of the U.S. commercial insurance market, excluding state workers’ comp funds.

Related: Loss ratio for Canadian commercial insurers deteriorates in accident year 2016 compared to same period in 2015: Willis Towers Watson survey


Print this page Share

Have your say:

Your email address will not be published. Required fields are marked *

*