U.S. commercial insurance prices accelerated during the fourth quarter of 2019, as the aggregate price change reported by carriers exceeded 6%, according to Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS). This is a continuation of the acceleration observed in recent quarters. The survey compared prices charged on policies underwritten during the fourth quarter of 2019 to those for the same coverage during the fourth quarter of 2018.
Data for nearly all lines indicated significant price increases, headlined by commercial auto, property, excess/umbrella liability, and directors’ and officers’ liability, where price increases exceeded double digits. Price changes were much larger for mid-market and large accounts than small accounts. Specialty lines price increases also trended upward materially in the fourth quarter. The survey continued to indicate price reductions for workers compensation in contrast to all other surveyed lines, though reductions are smaller than the recent past.
“We saw another large overall price increase in the fourth quarter,” said Alejandra Nolibos, senior director, Insurance Consulting and Technology, Willis Towers Watson. “Even workers compensation prices, which had been decreasing substantially recently, are moderating, a trend that we have observed throughout 2019 — despite the continued large price drops for California business.”
CLIPS is a retrospective look at historical changes in commercial property and 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.