U.S. commercial insurance prices continued their flat streak in the 2016 fourth quarter, climbing less than 1 percent, according to Willis Towers Watson’s latest Commercial Lines Insurance Pricing Survey.
As Willis Towers Watson noted, this is the fifth consecutive quarter where price hikes for the sector inched up less than 1 percent compared to the same, year-ago period.
Also worth noting: The moderation in pricing for the U.S. commercial insurance sector has been underway since the 2013 first quarter.
Willis Towers Watson said that the Q4 results generally mirrored those from Q3. Digging down further, the Q4 numbers revealed some modest price decreases for workers compensation and commercial property. Along the same vein, directors and officers coverage trended toward “more significant but moderating price decreases, according to the report.
One continued exception to flat or declining prices: commercial auto. Willis Towers Watson said the coverage is still generating “meaningful price increases.” Price changes for most other lines, by contrast, dipped in the low single digits.
“The rapid growth in the rate of prices increases seen in 2012 has since slowed for much of the commercial market, but not for commercial auto,” Alejandra Nolibos, director in Willis Towers Watson’s Americas Property & Casualty Insurance practice, said in prepared remarks. “This line’s cumulative price increases since 2012 is over 25 percent, compared to about 10 percent for the surveyed commercial market as a whole.”
Nolibos added that “loss experience has been benign for many of the other lines, but the dynamics of the auto business are changing quickly and dramatically, ultimately driving challenging results and rate need for the line.”
Willis Towers Watson said that prices changes were slightly negative for large accounts, and slightly positive for small and mid-market accounts.
Source: Willis Towers Watson