Commercial Insurance Prices Increase 2% in the First Quarter

Rate increases continue to be moderate

ARLINGTON, Va.--(BUSINESS WIRE)-- Commercial insurance prices increased in aggregate at a modest pace (2%) during the first quarter of 2015, according to the latest Commercial Lines Insurance Pricing Survey (CLIPS) conducted by global professional services company Towers Watson (NASDAQ: TW). This survey compared prices charged on policies underwritten during the first quarter of 2015 to those charged for the same coverage during the same quarter in 2014.

Price increases for most insurance lines were in the low single digits, with commercial auto and employment practices liability reporting the largest increases. However, employment practices liability price increases continue to drop, as do commercial property prices, which continue to show small but stable price decreases. Survey results indicated large account prices increasing at a lower rate than small and mid-market accounts.

Carriers reported an improvement of 2% in loss ratios in accident-year-to-date 2015 relative to the same period in 2014, as earned price increases continue to offset reported claim cost inflation for many lines. This builds on the estimated improvement of nearly 2% between 2013 and 2014.

“Commercial insurers still report favorable loss ratio trends in aggregate, even after many quarters of slowing price increases,” said Alejandra Nolibos, a director with Towers Watson’s Property & Casualty Insurance practice. “However, price increases are barely offsetting loss cost inflation in some lines; we may start to see pressure on the bottom line as reserve redundancies dry up,” she added.

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 first quarter of 2015 to the prices charged for the same coverage during the same quarter in 2014. For the most recent survey, data were contributed by 44 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds).

About Towers Watson

Towers Watson (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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20150615005089/en/

Towers Watson
Josh Wozman, +1 703-258-7670
[email protected]

Source: Towers Watson

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