June 13, 2016 by Canadian Underwriter
Commercial insurance prices in the United States increased modestly in aggregate – less than 1% – during the first quarter of 2016, continuing a three-year trend of smaller increases, according to the latest Commercial Lines Insurance Pricing Survey (CLIPS) by Willis Towers Watson (WTW).
The survey, released on Monday by the global advisory, broking and solutions company, compared prices charged on policies underwritten during the first quarter of 2016 to those charged for the same coverage during the same quarter of 2015. CLIPS data are based on both new and renewal business figures obtained directly from carriers underwriting the business. CLIPS participants represent a cross section of U.S. property & casualty insurers that includes many of the top 10 commercial lines companies and the top 25 insurance groups in the U.S. For the most recent survey, data were contributed by 40 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds), WTW said in a press release.
Price changes in the first quarter for most lines of business were generally consistent with changes in the fourth quarter of 2015. Prices for commercial auto reported the largest increase of all lines. In addition, three lines of business – workers compensation, commercial property, and directors and officers liability – continue to report modest price decreases.
Most other lines reported price changes in the low single digits, the release said. Large and mid-market accounts continue to experience an ongoing trend of mostly flat increases, as small accounts moderated to levels consistent with these larger accounts.
“The overall results in the first quarter were generally flat and about what we expected,” said Sean McDermott, director in WTW’s Americas Property & Casualty Insurance practice, in the release. “Despite ample capacity, price increases, albeit small, are still holding as claim cost inflation remains modest. The one outlier, commercial auto, where poor claim results have driven meaningful price increases over the past three quarters, is the line where pricing corrections continue.”