U.S. commercial insurance prices up 4% year-over-year in Q1 2014

A recent survey found no price decreases in any “standard commercial lines” of property and casualty insurance in the United States in the first three months of 2014, Towers Watson reported Monday.

The firm released its latest Commercial Lines Insurance Pricing Survey (CLIPS), reporting prices increased by 4% in aggregate in Q1 2014, when compared to prices during the same period in 2013.

“Prices increased for every line of business, with most in the low- to mid-single digits,” Towers Watson stated in a release.  “The largest price increase reported was in the employment practices liability line, followed by excess/umbrella liability and commercial auto. No standard commercial line of business reported a price decrease.”

The year-over-year price increases in Q1 2014 were lower than those reported in Q4 2013, “with the exception of professional liability,” Towers Watson noted.

“Although prices continued growing, the increases are the smallest in over two years — a full percentage point lower than last quarter, and a steep decrease from the 6% to 7% reported in the second half of 2012 and first half of 2013,” the company reported.

The survey data is “based on both new and renewal business figures obtained directly from carriers underwriting the business,” Towers Watson stated, adding that 43 insurers representing 20% of the U.S. commercial market (excluding state workers compensation funds) participated. Those participants “represent a cross section of U.S. property & casualty insurers that includes many of both the top 10 commercial lines companies and the top 25 insurance groups in the U.S.”

Respondents reported that loss ratios “improved 2% for accident-year-to-date 2014 relative to the same period in 2013 (excluding catastrophes), as earned price increases continued to more than offset low claim cost inflation,” Towers Watson stated.

Towers Watson’s services include advising the insurance industry on strategic and risk management issues.