Workers compensation pricing appears to have dipped slightly in the 2015 second-quarter. That’s the first time this has happened since 2010, Towers Watson said in a new report that tracked a tiny increase in aggregate for commercial insurance prices overall during the period.
Beyond workers compensation, large accounts also saw a dip in pricing, according to Towers Watson’s latest Commercial Lines Insurance Pricing Survey.
“There are indications that workers compensation pricing may have moved into negative territory for the first time since 2010 and that pricing is also down for large account – a segment that is typically quick to be affected by competition,” Alejandra Nolibos, a director with Towers Watson’s P/C insurance practice, said in prepared remarks.
Nolibos added that “should the benign loss trends that have market the last several years return to longer-term levels, some of the recent underwriting success in long-tailed lines may be eliminated.”
Still, Towers Watson found for the most part low single-digit price increases for the quarter, reflecting a trend of moderation that has continued since early 2013.
Commercial auto grew the largest, followed by employment practices liability. Small and mid-market accounts also generated smaller but stable price increases. Towers Watson said. Directors and officers and commercial property produced small price increases, according to the report.
Additionally, carriers during the quarter reported a 1 percent improvement in loss ratios in accident-year-to-date 2015 compared to the same period in 2014. That came while earned price increases offset low claim cost inflation reported by many lines, Towers Watson said.
In comparison, there was flat loss ratio movement between 2013 and 2014. At the same time, Towers Watson cautioned that 2015 loss ratios are still developing.
“Price increases continue their downward trend, as strong underwriting results allow for some room in pricing,” Nolibos said.
Source: Towers Watson