Price change reported by carriers increased nearly 10%
ARLINGTON, VA, December 7, 2020 – U.S. commercial insurance prices again grew significantly in the third quarter of 2020, according to leading global advisory, broking and solutions company Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the third quarter of 2020 to those charged for the same coverage and quarter in 2019 and found the aggregate commercial price change reported by carriers was near 10% for the second consecutive quarter.
Price changes for nearly every line were consistent with the increases from the prior quarter survey. Excess/umbrella and directors’ and officers’ liability insurance reported the largest price increases; commercial auto showed increases of near or above double digits for the 12th consecutive quarter. The outlier continues to be workers compensation, which indicated modest price reductions, though they have tempered for the last seven quarters. Price changes differed by account sizes with small accounts more muted, mid-market accounts near double digits and large accounts well into double digits.
“While commercial insurance prices continued to rise this quarter at a significant rate, CLIPS data indicate the acceleration in prices observed in recent quarters stabilized somewhat,” said Yi Jing, director, Insurance Consulting and Technology, Willis Towers Watson. “The price change level holding steady occurs despite the tethering impact of past workers compensation price reductions waning.”
CLIPS is a retrospective look at historical changes in commercial property & 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.
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 third quarter of 2020 with the prices charged for the same coverage during the same quarter of 2019. For this most recent survey, 36 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.
