Poor claim results continue to drive “meaningful” price increases for commercial auto, but commercial insurance as a whole barely budged during the 2016 first quarter versus last year.
Willis Towers Watson’s latest Commercial Lines Insurance Pricing Survey (CLIPS) found the trend was very much in line with the 2015 fourth quarter. That period, as in the 2016 first quarter, saw modest price declines for workers compensation, commercial property, and directors and officers liability. Most other lines saw prices tick up in the low single digits. (Willis Towers Watson does not make the full/detailed survey available to the public.)
Sean McDermott, a director in Willis Towers Watson’s Americas Property & Casualty insurance practice, said that the lines with little to no price increases can credit a combination of price upticks that held even as claims cost inflation stayed modest, with ample capacity in play.
Commercial auto, once again, is a much different story, McDermott said in prepared remarks.
“Commercial auto, where poor claim results have driven meaningful price increases over the past three quarters, is the line where pricing corrections continue,” McDermott said.
Also worth noting: large and middle-market accounts are still seeing flat increases, with smaller accounts catching up, so to speak, with the flat to moderate price upticks.
Willis Towers Watson said that the overall market has behaved this way now for three years, as smaller increases have become the norm. Early 2012 was the last time rates peaked in aggregate, at 7 percent.
Source: Willis Towers Watson