U.S. commercial insurance prices continued to accelerate in the 2019 third quarter at a pace not seen for years, Willis Towers Watson said in a new report.
“This quarter we saw the largest overall price shift since 2013,” Alejandra Nolibos, senior director, Insurance Consulting and Technology, Willis Towers Watson, said in prepared remarks.
The firm determined that the aggregate price change for carriers in the space exceeded a 4 percent increase during the 2019 third quarter, the result of steady acceleration over the previous year. Commercial lines pricing grew nearly 2 percent for all of 2018 and the 2019 first quarter, and almost 4 percent in Q2 2019, according to Willis Towers Watson’s latest Commercial Lines Insurance Pricing Survey.
Willis Towers Watson ‘s survey compared prices charged on policies underwritten during the third quarter of 2019 to those for the same coverage during the third quarter of 2018.
Commercial auto, commercial property, excess/umbrella liability and directors and officers liability (D&O) all produced significant price increases during the quarter, with all except property “exceeding double digit rate increases,” according to the report.
One perpetual exception: workers compensation, which produced “material price reductions” during Q3 2019, though Willis Towers Watson said that workers comp rate decreases have moderated somewhat.
Price changes were more pronounced for large accounts than those reported for small and mid-market accounts. Specialty lines price increases also trended upward significantly, the report said.
Nolibos noted that employment practices liability and medical professional liability also showing sizable upward shifts in pricing. The CLIPS report found insurers have been responding to worsening loss trends across affected lines through pricing, though terms and conditions have tightened, according to other data cited by Willis Towers Watson.
Source: Willis Towers Watson/CLIPS