March 14, 2016 by Canadian Underwriter
The change in commercial insurance prices from the fourth quarter of 2014 to the fourth quarter of 2015 were “nearly flat,” Willis Towers Watson plc reported Monday.
London-based Willis Towers Watson released its Commercial Lines Insurance Pricing Survey (CLIPS), which is based on information provided by participating companies.
CLIPS was a product of Towers Watson & Co. before its recent merger with commercial insurance brokerage Willis Group Holdings plc.
Commercial prices “were again nearly flat during the fourth quarter of 2015,” Willis Towers Watson stated.
“In general, price changes in the fourth quarter for most lines of business were fairly consistent with changes reported in the third quarter,” the firm reported, adding there were “modest prices decreases” in commercial property, directors and officers and workers compensation.
“The outlier in the results continues to be commercial auto, where meaningful price increases continue to be reported, with little moderation over the past three quarters,” according to the latest CLIPS. “Price changes for most other lines fell in the low single digits.”
CLIPS is based on data on premium volume changes, and estimates of changes in loss costs, provided by carriers, for each of the commercial lines they write.
Willis Towers Watson computes changes in loss ratios from those price and loss cost movements.
The data is segmented by small, middle market and large accounts, and broken down by lines, such as D&O, errors and omissions, professional liability, employment practices liability and surety.
“Historical claim cost information reported by participating carriers points to an improvement of 1% in loss ratios in accident-year 2015 relative to the same period in 2014, as earned price increases offset modest reported claim cost inflation for many lines,” Willis Towers Watson said in its latest CLIPS. “This indication compares to the flat loss ratio change between 2013 and 2014.”