Higher prices across all account sizes for standard commercial lines in U.S.: Towers Watson

Commercial insurance prices in aggregate increased by almost 7% for 2012 Q4 in the United States, with price increases observed across all account sizes for standard commercial lines, notes a new survey from Towers Watson.

The company’s most recent Commercial Lines Insurance Pricing Survey (CLIPS), dated Mar. 2013, compares prices charged on policies underwritten during 2012 Q4 to those charged for the same coverage during 2011 Q4.

Towers Watson notes that pricing data reported by carriers for the fourth quarter of 2012 indicated a pause in the upward industry price acceleration observed since the start of 2011. There was some upward movement in specialty lines, but price-change indications in total and by line of business were generally consistent with price increases in 2012 Q3, the statement adds.

“Price increases were observed across all account sizes for standard commercial lines, with larger increases observed in mid-market and large accounts than in small accounts,” survey results show.

Increases for most lines fell in the mid- to upper-single digits, while no line of business had an overall price increase of less than 3%.

Towers Watson notes that historical loss cost information reported by participating carriers points to an improvement of almost 4% in loss ratios in accident-year 2012 relative to 2011, as earned price increases more than offset reported claim cost inflation. CLIPS results are intended to exclude catastrophes, the company adds.