U.S. commercial insurance prices again showed an aggregate increase just above 6%

U.S. commercial insurance prices grew again in the third quarter of 2023, according to WTW’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the third quarter of 2023 to those charged for the same coverage during the same quarter in 2022. The aggregate commercial price change reported by carriers spiked upward to nearly and above 10% in the second through fourth quarters of 2020. Then it declined to just below 5% in the fourth quarter of 2022 but increased back to above 5% in the first quarter of 2023, rising to just above 6% in the second and third quarters of 2023.

Line of business price changes

In the third quarter of 2023, data for nearly all lines continue to indicate moderate to significant price increases, with the exception of workers compensation, directors’ and officers’ liability, and cyber. CLIPS continues to indicate a slight price reduction for workers compensation. Directors’ and officers’ liability saw another quarter of price decrease but less than the prior quarter. Commercial property continued to see a double-digit price increase, although slightly lower than the prior quarter.

The second largest price increase in the third quarter of 2023 continued to come from excess/umbrella liability, which saw significantly accelerating prices over the previous 17 quarters and a slightly higher increase than the prior quarter, in the double digits. Commercial auto saw reported price increases near or above double digits for the 24^th consecutive quarter. Cyber, which was first introduced into the survey in the fourth quarter of 2021 with a volume much smaller than all other lines, continued to show a slowdown in its price change, with a slightly lower price decrease than in the prior quarter.

Account size price changes

When comparing account sizes, reported price changes for small, mid-market and large accounts were below double digits. Specialty lines essentially had flat rate change, where professional liability and employment practice liability generally showed rate increases offset by rate decreases experienced in directors’ and officers’.