Commercial insurance prices in the U.S. increased by over 2% in the third quarter of 2018, according to leading global advisory, broking and solutions company Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies written during the third quarter of 2018 to those charged for the same coverage during the equivalent quarter in 2017.
Price changes for most lines were similar to those reported last quarter. Three lines — commercial auto, commercial property and excess/umbrella liability — showed material price increases. Workers compensation reported ongoing material price reductions in contrast to all other surveyed lines. When comparing the survey results by account size, price changes were once again positive and of similar magnitude across all segments. Mid-market and large account price adjustments caught up to the recently larger increases reported for small accounts.
“A second quarter of meaningful price increases may signal a reaction to the much talked about emergence of unfavorable loss trends beyond auto,” said Ben Williams, director, Insurance Consulting and Technology, Willis Towers Watson. “As in the past, and perhaps not surprisingly, increases in small accounts seem to have acted as a leading indicator: Middle market and large accounts are catching up with larger increases this quarter.”
CLIPS is a retrospective look at historical changes in commercial P&C prices and claim cost inflation. A forward-looking analysis of commercial P&C trends, outlook and rate predictions can be found in Willis Towers Watson’s Marketplace Realities series.
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