Survey indicates “modest” increase in U.S. commercial property insurance prices
June 10, 2013 by Canadian Underwriter
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Commercial insurance prices in the U.S. increased during the fourth quarter of 2013, with the largest increases in employment practices liability and workers compensation, a survey released Monday by Towers Watson & Co. suggests.
The increase in U.S. property coverage prices, from the last quarter of 2012 to the first quarter of this year, was in the “mid single digits,” New York-based Towers Watson suggested in a press release.
“Interestingly, pricing for property grew only modestly, with less movement than might have been expected considering losses related to Hurricane Sandy,” stated Tom Hettinger, P&C sales and practice leader for the Americas of Tower Watson, in the release. “That is not surprising, as there is plenty of reinsurance capacity out there.”
In its latest Commercial Lines Insurance Pricing Survey (CLIPS), Towers Watson noted that in aggregate, commercial insurance prices increased almost 7% in the first quarter of 2013.
The data Towers Watson uses in its CLIPS comes from new and renewal figures from a “cross section” of U.S. P&C carriers. The survey released Monday compared prices charged on policies written during the first quarter of 2013 to those charged for the same coverage in the final quarter of 2012. The Q1 2013 survey data came from 40 carriers representing about 20% of the U.S. commercial insurance market, excluding state workers compensation funds.
“Price increases were observed across all account sizes for standard commercial lines, with larger increases observed in mid market than in large accounts and small accounts,” Towers Watson stated.
“While results are very preliminary, historical loss cost information reported by participating carriers points to an improvement of almost 4% in loss ratios in accident (year-to-date) 2013 relative to the same period in 2012, as earned price increases more than offset reported claim cost inflation,” Towers Watson stated, adding the CLIPS results “are intended to exclude catastrophes.”
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