Commercial Insurance Prices Increase 3% in the Third Quarter
09 December 2014 - 1:05AM
Business Wire
The decline in pricing level increases halts, after five
consecutive quarters of moderation
Commercial insurance prices increased by a modest 3% in
aggregate during the third quarter of 2014, according to the latest
Commercial Lines Insurance Pricing Survey (CLIPS) conducted by
global professional services company Towers Watson (NYSE, NASDAQ:
TW). Price changes remained at nearly the same level as last
quarter, after five consecutive quarters of moderation in the rates
of increases. The survey compares carriers’ pricing on policies
underwritten during the third quarter of 2014 to those underwritten
in the same quarter of 2013.
Price increases are similar to those from the previous quarter
for most commercial lines, but carriers reported continuing
moderation in workers compensation, and some of the specialty lines
surveyed were offset by stabilization in property. The employment
practices liability line reported the largest price increases,
followed by commercial auto. Price increases for most commercial
lines registered in the low single digits. Commercial property data
indicated flat pricing following a slight price decrease one
quarter ago.
Survey results indicated more moderate price increases for large
and specialty accounts compared to small and mid-market
accounts.
“After many quarters of moderation in price increases, we are
seeing a lull,” said Alejandra Nolibos, director in Towers Watson’s
Americas P&C practice. “We are seeing this for many of the
lines surveyed, but I would highlight property. Last quarter, we
noted price changes for that class had reached negative territory;
recent data, however, indicate flat pricing. Increases in workers
compensation pricing, on the other hand, continue to moderate.”
The survey noted that loss ratios improved 2% for
accident-year-to-date 2014, relative to the same period in 2013
(excluding catastrophes), as earned price increases continued to
offset reported claim cost inflation for many lines. This trend
builds on an estimated improvement of nearly 6% between 2012 and
2013. In aggregate, carriers reported relatively flat claim cost
inflation for accident-year 2013 and approximately 2% for 2014 year
to date.
About CLIPS
CLIPS data are based on both new and renewal business figures
obtained directly from carriers underwriting the business. CLIPS
participants represent a cross section of U.S. property &
casualty insurers that includes many of the top 10 commercial lines
companies and the top 25 insurance groups in the U.S. This
particular survey compared prices charged on policies underwritten
during the third quarter of 2014 to the prices charged for the same
coverage during the same quarter in 2013. For the most recent
survey, data were contributed by 43 participating insurers
representing approximately 20% of the U.S. commercial insurance
market (excluding state workers compensation funds).
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global
professional services company that helps organizations improve
performance through effective people, risk and financial
management. With 15,000 associates around the world, the company
offers consulting, technology and solutions in the areas of
benefits, talent management, rewards, and risk and capital
management. Learn more at towerswatson.com.
Towers WatsonJosh Wozman, +1
703-258-7670josh.wozman@towerswatson.com
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