The U.S. commercial insurance sector has now produced four consecutive quarters of price increases, according to Willis Towers Watson’s latest survey of the sector.
Pricing ticked more than 2 percent higher in the 2018 third quarter, Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS) found. This follows a price hike of nearly 3 percent in Q2 2018, and now prices have increased in the low-to-middle single digits for four straight quarters.
Ben Williams, director, Insurance Consulting and Technology for Willis Towers Watson, said that the price increases, particularly over the last two quarters, could be the sign of a larger trend.
“A second quarter of meaningful price increases may signal a reaction to the much talked about emergence of unfavorable loss trends beyond auto,” Williams, said in prepared remarks. “As in the past, and perhaps not surprisingly, increases in small accounts seem to have acted as a leading indicator: Middle market and large accounts are catching up with larger increases this quarter.”
Trends have continued on a similar trajectory over the last 12 months. Willis Towers Watson found that three lines — commercial auto, commercial property and excess/umbrella liability — produced significant price increases.
One exception: Workers compensation reported ongoing major price reductions compared to all other surveyed lines.
When comparing the survey results by account size, price changes increased by a similar magnitude across all segments. Mid-market and large account price adjustments caught up to the recently larger increases reported for small accounts, Willis Towers Watson said.
CLIPS is a retrospective look at historical changes in commercial P/C prices and claim cost inflation.
Source: Willis Towers Watson