Written premium price levels charged on insurance policies underwritten during the first quarter of 2016 increased 1.2% from the prior year quarter, according to Willis Towers Watson’s Commercial Lines Insurance Pricing Survey – Canada (CLIPS Canada).
The most recent survey, released on Monday, compared prices charged on commercial policies underwritten during the first quarter of 2016 to those charged for the same coverage during the same quarter in 2015. For the survey, data was contributed by six Canadian insurers/groups, representing close to 20% of the Canadian commercial insurance market.
The survey’s aggregate findings indicate that commercial insurance prices in aggregate have been increasing marginally for the past three years. Survey results are intended to exclude catastrophes.
Other aggregate findings include:
- The increase was highest in the first quarter 2015 at 2.9%. Since that quarter, the magnitude of the price level increase had been gradually decreasing until the fourth quarter of 2015;
- Price increases were reported for commercial property, general products liability and excess umbrella liability. Survey respondents reported the largest price increases in the general products and liability line at 2.8%, while professional liability had the largest decrease at -1.6%;
- Price changes for all lines were in the low- to mid-single digits;
- Reported claim cost information reveals a loss ratio improvement of 1.2% in accident year 2016 compared to the same period in 2015. We note that as year-to-date survey results provide a preliminary perspective, a subset of the participants provide claims cost inflation and as claims results can be volatile, insurers will wish to review and monitor additional data as it becomes available; and
- Carrier estimates of the claim cost inflation underlying the loss ratio movement is 0.4% for accident year 2016.