U.S. commercial insurers report aggregate price changes of just under 10% for Q2
09/08/2020 | 09:26am EDT
ARLINGTON, Va., Sept. 08, 2020 (GLOBE NEWSWIRE) -- U.S. commercial insurance prices increased substantially during the second quarter of 2020, rising by almost 10% compared with prices charged during the same quarter of 2019. These findings are based on leading global advisory, broking and solutions company Willis Towers Watson’s (NASDAQ: WLTW) Commercial Lines Insurance Pricing Survey (CLIPS).
Excess/umbrella and directors’ and officers’ liability data indicated the largest price increases, with prices for both growing by over 20% for the second consecutive quarter. Commercial auto data indicated price increases near or above double digits for the 11th consecutive quarter. Property prices accelerated significantly in the past four quarters, now indicating increases well into the double digits. Only workers compensation showed price reductions, and they continue to slowly decrease in magnitude. Price changes differed significantly by account sizes. Small commercial accounts grew by mid-single digits; mid-market accounts showed double-digit increases, and large accounts were well above this range.
“Second quarter data indicated the biggest quarter-to-quarter shift in CLIPS history, dating back to 2003 and underscoring the uncertainty of the day,” said Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson. “The combination of social inflation, civil unrest, the economy and uncertainty around COVID-19 has created an increasingly cautious industry.”
CLIPS is a retrospective look at historical changes in commercial property and casualty insurance (P&C) prices and claim cost inflation. A forward-looking analysis of commercial P&C trends, outlook and rate predictions can be found in Willis Towers Watson’s Insurance Marketplace Realities series.
About Willis Towers Watson
Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.
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. P&C insurers that includes many of the top 10 commercial lines companies and the top 25 insurance groups in the U.S. This survey compared prices charged on policies written during the second quarter of 2020 with the prices charged for the same coverage during the same quarter of 2019. For this most recent survey, 38 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.