U.S. commercial insurance prices continued their robust climb in the 2020 second quarter, rising by close to 10 percent overall compared to the same period a year ago, according to Willis Towers Watson’s latest Commercial Lines Insurance Pricing Survey.
Uncertainty driven by a variety of factors helped shape the trend.
“Second quarter data indicated the biggest quarter-to-quarter shift in CLIPS history, dating back to 2003 and underscoring the uncertainty of the day,” Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson, said in prepared remarks. “The combination of social inflation, civil unrest, the economy and uncertainty around COVID-19 has created an increasingly cautious industry.”
Broken down, excess/umbrella and directors and officers liability cover saw the biggest price increases. Price hikes surpassed 20 percent for both for the second consecutive quarter, Willis Towers Watson said.
Another standout: Commercial auto, with data for the sector showing price increases that were either near or above double digits for the eleventh consecutive quarter. Property prices also saw accelerate growth – a trend that goes back four quarter – with increases “well into the double digits,” according to the survey.
Once again, workers compensation was a noteworthy exception, with prices going down, and Willis Towers Watson said they continued a trend of decreasing slowly.
The survey found that small commercial accounts grew by mid-single digits. Mid-market accounts generated double-digit increases, and large accounts grew higher still, Willis Towers Watson said.
CLIPS is a retrospective look at historical changes in commercial property/casualty insurance prices and claim cost inflation.
Sources: Willis Towers Watson