U.S. commercial insurance prices increased again during the first quarter of 2021, 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 underwritten during the first quarter of 2021 to those charged for the same coverage and quarter in 2020 and found the aggregate commercial price increase was just below 8%.
Data for nearly all lines indicated significant price increases in the first quarter; however, the increases were lower than those reported in each of the previous three quarters.
Excess/umbrella and directors and officer’s liability still showed the largest price increases, while commercial auto and property price increases were also near or above double digits. Workers compensation continued to indicate a slight price reduction, in contrast to nearly all other surveyed lines. Reported price changes for account sizes were more muted for small accounts, below double digits for mid-market and above double digits for large accounts and specialty lines.
“The rate of price increases has moderated fairly significantly, all while still elevated versus historical norms. This is evident by the absolute value of the movement from the fourth quarter of last year to now, which is one of the biggest one-quarter movements we’ve seen in survey history,” said Yi Jing, director, Insurance Consulting and Technology, Willis Towers Watson.
CLIPS is a retrospective look at historical changes in commercial property & casualty insurance (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 Insurance Marketplace Realities series.
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Willis Towers Watson is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.