U.S. commercial insurance price hikes surpassed 10 percent in aggregate during the 2020 fourth quarter, another robust climb for a sector that produced aggressive rate hikes all year, according to Willis Towers Watson’s new Commercial Lines Insurance Pricing Survey, or CLIPS.
Willis Towers Watson said the increases were the highest its CLIPS survey has ever tracked.
Nearly all lines produced significant price increases, with the largest coming from excess/umbrella liability and directors and officers liability, Willis Towers Watson said.
As has become commonplace, workers compensation was the sole exception to the rate hike surge, producing a slight price reduction rather than large rate hikes, as compared to the 2019 fourth quarter. Workers comp pricing trends may be changing, however. Yi Jing, director, Insurance Consulting and Technology for Willis Towers Watson, said in prepared remarks that workers compensation prices essentially flattened during Q4 “after the last 22 quarters of rate decreases.”
Willis Towers Watson said that price changes for most lines tracked increases recorded in the 2020 third quarter. Small accounts saw more subdued increases, middle-market accounts generated double digit rate hikes, and large accounts were “well into double digits,” it said.
As well, claim cost trends from the surveyed data indicated that loss ratios (excluding catastrophes) for accident year 2020 project to be lower than 2019 across all surveyed lines except workers compensation.
The Willis Towers Watson CLIPS report is a retrospective look at historical changes in commercial property & casualty insurance (P&C) prices and claim cost inflation.
Source: Willis Towers Watson