Aggregate price increase declined to 6%
ARLINGTON, VA, June 8, 2022 — U.S. commercial insurance prices grew again in the first quarter of 2022, according to WTW’s latest 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 was 6%, approximately one point lower than with Q4 2021.
Data for nearly all commercial lines continue to indicate significant price increases in the first quarter. Professional liability, which had been significantly accelerating over the previous nine quarters, experienced a lower increase than the prior quarter although still a double-digit rate increase. Other lines, with the exception of workers compensation, continued to show price increases, though similar to or slightly below those in Q4 2021.
In contrast to nearly all other surveyed lines, workers compensation continued to show the strongest rate decreases, similar to the prior quarter. Cyber was first introduced to the survey in Q4 2021, and continued to show a significant rate increase, although the reported volume is much smaller than other lines. When comparing account sizes, reported price changes were lower than prior quarter for all size categories.
Companies have revised their estimates for claim cost inflation in aggregate for 2021 to be above 3.0%, with most changes in property. This seems to be consistent with the recent changes in general inflation, particularly with the cost of materials and labor related to property damage repairs.
“The price increases for most lines continued to be strong in the first quarter of 2022, though the magnitude of increase dropped compared with prior quarters.”
Yi Jing | Director, Insurance Consulting and Technology, WTW
“The price increases for most lines continued to be strong in the first quarter of 2022, though the magnitude of increase dropped compared with prior quarters” said Yi Jing, Director, Insurance Consulting and Technology, WTW.
CLIPS is a retrospective look at historical changes in commercial property & casualty insurance (P&C) prices and claims cost inflation. A forward-looking analysis of commercial P&C trends, outlook, and rate predictions can be found in WTW’s Insurance Marketplace Realities series.
WTW’s Insurance Consulting and Technology business has over 1,200 colleagues operating in 35 markets worldwide. It is a leading provider of advice, solutions and software – primarily to the insurance industry. Its consulting services help clients manage risk and capital, improve business performance, and create competitive advantage – by focusing on financial and regulatory reporting, enterprise risk and capital management, M&A and corporate restructuring, products, pricing, business management and strategy.
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 first quarter of 2022 with the prices charged for the same coverage during the same quarter of 2021. For this most recent survey, 42 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.
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