ARLINGTON, VA, March 10, 2020 — U.S. commercial insurance prices accelerated during the fourth quarter of 2019, as the aggregate price change reported by carriers exceeded 6%, according to Willis Towers Watson’s (NASDAQ: WLTW) Commercial Lines Insurance Pricing Survey (CLIPS). This is a continuation of the acceleration observed in recent quarters. The survey compared prices charged on policies underwritten during the fourth quarter of 2019 to those for the same coverage during the fourth quarter of 2018.
Data for nearly all lines indicated significant price increases, headlined by commercial auto, property, excess/umbrella liability, and directors’ and officers’ liability, where price increases exceeded double digits. Price changes were much larger for mid-market and large accounts than small accounts. Specialty lines price increases also trended upward materially in the fourth quarter. The survey continued to indicate price reductions for workers compensation in contrast to all other surveyed lines, though reductions are smaller than the recent past.
“We saw another large overall price increase in the fourth quarter,” said Alejandra Nolibos, senior director, Insurance Consulting and Technology, Willis Towers Watson. “Even workers compensation prices, which had been decreasing substantially recently, are moderating, a trend that we have observed throughout 2019 — despite the continued large price drops for California business.”
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.
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 fourth quarter of 2019 with the prices charged for the same coverage during the same quarter of 2018. 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.
