U.S. commercial insurance prices showed an aggregate increase of 6%

U.S. commercial insurance prices grew again in the first quarter of 2022, according to WTW’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the first quarter of 2022 to those charged for the same coverage during the same quarter in 2021. The aggregate commercial price change reported by carriers grew by over 6% for the first quarter of 2020, then spiked upward to nearly and above 10% in the second through the fourth quarters of 2020, and then declined to just below 8% in the first and second quarters of 2021, just above 7% in the third and fourth quarters of 2021, and now declined to 6% in the first quarter of 2022.

Line of business price changes

Data for nearly all lines continue to indicate significant price increases in the 1^st quarter. The largest price increase comes from Cyber which was first introduced in the survey in the 4^th quarter of 2021 althouth the volume is much smaller than all other lines. The second largest price increase comes from professional liability which saw significantly accelerating prices over the previous nine quarters and showed the largest change compared to other lines. Both excess/umbrella liability and directors & officers liability data had been indicating modest price increases for all of 2018, with sharp adjustments upward in the past twelve quarters and peaked in 2020. Both still reported significant price increases though lower than those in the 4^th quarter of 2021.

Commercial auto saw reported price increases near or above double digits for the eighteenth consecutive quarter.Property coverage saw similar increase to prior quarter. CLIPS continues to indicate a slight price reduction for workers compensation, in contrast to nearly all other surveyed lines, though the decreases have tempered somewhat for each of the last thirteen quarters.

Account size price changes

When comparing account sizes, similar to the prior quarter reported price changes were all below double digits except for specialty lines.

Loss cost trend

Companies have revised their estimate of claim cost inflation in aggregate for 2021 to be above 3.0% with most changes seen in property lines. This seems to be consistent with the recent changes in general inflation, particularly in the cost of materials and labor costs related to property damage repairs.

Year-Over-Year price level change

Then spiked upward to nearly and above 10% in the second through the fourth quarters of 2020, and then declined to just below 8% in the first and second quarters of 2021, just above 7% in the third and fourth quarters of 2021, and now declined to 6% in the first quarter of 2022.

Change in price level vs. same quarter one year prior