Price Check: Four commercial lines' prices rise, two decline in first quarter.
U.S. commercial insurance prices rose in the first quarter, compared with the year-ago first quarter, as four standard lines reported material price increases, said Willis Towers Watson.
For most lines, price changes were similar to or slightly above those reported in the fourth quarter of 2018, the broker said in a statement.
"Four standard lines indicated material price increases: commercial auto, commercial property excess/umbrella liability and directors and officers liability" the broker said. "The outlier in the survey results continues to be commercial auto, where significant price increases were again reported--in the double digits for the fourth consecutive quarter. Price changes were positive and of reasonably similar magnitude across all account sizes."
Two lines--workers' compensation and surety--saw price declines for the quarter, Willis Towers Watson said in an email.
The broker's Commercial Lines Insurance Pricing Survey compared prices charged on policies underwritten during the first quarter of 2019 with those charged for the same coverage during the same quarter in 2018. The price change reported by carriers for the quarter was just above 2%, Willis Towers Watson said.
"Overall, price changes were consistent with recent surveys, with the exception of directors and officers liability, where data now indicate an uptick of price increases into the mid-single digits," said Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson, in a statement. "Also, while estimates of 2018 claim cost inflation are still elevated compared to the recent past, they have moderated somewhat from estimates provided in our last survey as the data continue to mature."
The CLIPS includes 40 insurers that include national carriers, regional players and specialty insurers, the broker said.
In its CLIPS report for the fourth quarter, Willis Towers Watson said U.S. commercial insurance prices rose modestly continuing an upward trend seen throughout 2018
According to its CLIPS at that time, the price change reported by carriers for the fourth quarter was just under 2%. The survey compared prices charged on policies underwritten during the fourth quarter of 2018 with those charged for the same coverage during the same quarter in 2017.
Price changes for most lines were similar to those reported in the third quarter, the broker said at the time.
CLIPS is a retrospective look at historical changes in commercial property/casualty prices and claim-cost inflation, according to Willis Towers Watson. The broker said a forward-looking analysis of commercial P/C trends, outlook and rate predictions can be found in its Marketplace Realities 2019 report, published in early November 2018. In Marketplace Realities 2019, Willis Towers Watson said it expects a continuation of modest price rises. The broker said in casualty lines, increases should be in the low single digits, and in property, increases "could be a bit higher for programs affected by losses, though not as steep as the rate hikes immediately following 2017's mega losses, and some property buyers will be able to renew flat.
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|Title Annotation:||Industry Updates|
|Date:||Jul 1, 2019|
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