A moderation of commercial lines insurance pricing that began in early 2013 continued close to two years later, Towers Watson determined in its latest survey of the sector.
Specifically, prices grew a modest 2 percent in the 2014 fourth quarter over the same period the previous year, Towers Watson found in its new Commercial Lines Insurance Pricing Survey.
While price moderation paused a bit in the 2014 third quarter, the trend has generally continued apace since the 2013 first quarter, Towers Watson said. Before that, in 2012, commercial lines price increases typically hit the 6 percent or 7 percent range.
Of course, those price gains in Q4 varied widely by commercial lines subsector. Employment practices liability and commercial auto generated large price gains, Towers Watson said, noting that most lines saw increases in the low single-digit range.
On the other hand, commercial property insurance pricing stayed flat for its second consecutive quarter in Q4, following a slight price hike two quarters prior, Towers Watson said.
Broken down further, large and specialty accounts saw moderate price spikes, but small and mid-market accounts enjoyed more robust increases.
Other findings from the survey:
- Historical claim cost information reported by participating carriers saw a 3 percent improvement in loss ratios in the 2014 accident year compared to the same period in 2013. This came from earned price increases offsetting reported claim cost information for most lines.
- Between 2012 and 2013, the estimated loss ratio improved close to 5 percent.
Source: Towers Watson