Commercial Lines Insurance Pricing Survey 2024 Q4
U.S. commercial insurance prices grew again in the fourth quarter of 2024, according to WTW’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the fourth quarter of 2024 with those charged for the same coverage during the same quarter in 2023. The aggregate commercial price change reported by carriers spiked upward to nearly 10% in the second through fourth quarters of 2020. Since then, it started to decline and decreased to just below 5% in the fourth quarter of 2022 but increased to above 6% in the second quarter of 2023. Over the past six quarters, the price increase has been very close to 6%.
Data for nearly all lines continue to indicate moderate to significant price increases in the fourth quarter with the exception of workers compensation, directors' and officers' liability, cyber and surety bonds. The largest price increases continue to come from excess/umbrella liability and commercial auto liability, both of which retained a double-digit reported price increase that was also higher than the prior quarter. In fact, commercial auto liability’s price increase this quarter hit its highest in the history of CLIPS. After having significant price increases during 2023, commercial property continued to see a price increase but at a level much lower than 2023. Although commercial property still retained a price increase, it had the largest movement from the prior quarter among all surveyed lines.
When comparing account sizes, reported price increases for small and mid-market accounts were lower than the prior quarter. Large accounts retained the same price increase as the prior quarter. Specialty lines continued to have a small rate decrease as a result of the continuing price decrease seen in directors’ and officers’ liability.
CLIPS data point to modest loss ratio improvements of 2% and 3% for 2023 and 2024, respectively. Insurers indicate claim cost inflation lower than earned price increase realized for both 2023 and 2024.
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Q4 brings 5.6% aggregate increase in U.S. commercial insurance rates | .8 MB |