U.S. commercial insurance price hikes showed no sign of letting up in the 2021 first quarter, though a predicted moderating of the increases is starting to happen.
Willis Towers Watson calculated aggregate price increases of just below 8 percent for Q1 2021, according to its latest Commercial Lines Insurance Pricing Survey. That’s robust, but U.S. rate hikes for the sector either nearly hit or surpassed 10 percent in the 2020 second through fourth quarters.
The trend also appears to be the case globally. In March, Marsh concluded, for example, that global commercial insurance pricing was still growing by double digits, but that the rate of increase dipped in the first quarter for the first time since late 2021.
Willis Towers Watson found that the largest U.S. commercial insurance price hikes in Q1 came from the usual suspects: excess/umbrella liability and directors and officers liability. Both have experienced “significantly accelerating prices” over the previous five quarters, but both also saw the largest reduction in price increases compared to Q4 2020.
Commercial auto also produced price increases near or above double digits once again, now for 14 consecutive quarters running. As well, commercial auto generated rate hikes near or above double digits for the eighth consecutive quarter.
Once again, workers compensation remains an outlier, generating a slight price reduction. At the same time, decreases have moderated somewhat for each of the last nine quarters, Willis Towers Watson said.
Price changes tended to be above double digits for large accounts and specialty lines and slightly below double digits for mid-market accounts. They were much more muted for small commercial accounts, according to the report.
Source: Willis Towers Watson