U.S. commercial insurance prices edge slightly higher during the fourth quarter

ARLINGTON, Va., March 12, 2018 -- Commercial insurance prices in the U.S. inched upward in the fourth quarter of 2017, according to leading global advisory, broking and solutions company Willis Towers Watson’s (NASDAQ:WLTW) Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies written during the fourth quarter of 2017 with those charged for the same coverage during the equivalent quarter in 2016. Price changes reported by carriers still averaged less than 1% for the 10th consecutive quarter, following a moderating trend in price increases that began in the first quarter of 2013.

Data for two lines, workers compensation and directors and officers liability, indicated material price decreases in the fourth quarter, underscored by larger price decreases than the prior quarter for workers compensation, in contrast to most other lines. Commercial property prices, which had been showing decreases for much of the recent past, now indicate increases in the low single digits. The outlier in the results continues to be commercial auto, where meaningful price increases are again reported and are nearing double digits. Price changes were positive across all account size segments, as large accounts moved from modest reductions to modest increases in aggregate.

“Last year’s weather disasters were some of the most financially disruptive in history, and the survey results indicate we’re likely now seeing the initial response to the catastrophes on the pricing side of the property market,” said Pierre Laurin, Americas Property & Casualty (P&C) sales and practice leader for Insurance Consulting and Technology, Willis Towers Watson. “Further, commercial auto rate increases show no signs of abatement, as insurers seek to restore the line to a profitable rate level.”

CLIPS is a retrospective look at historical changes in commercial P&C prices and claim cost inflation. Separately, Willis Towers Watson issues a forward-looking analysis of commercial P&C trends, outlook and rate predictions through its Marketplace Realities series.

About Willis Towers Watson

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 40,000 employees serving more than 140 countries. 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.

About CLIPS

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. property & casualty insurers that includes many of the top 10 commercial lines companies and the top 25 insurance groups in the U.S. This particular survey compared prices charged on policies written during the fourth quarter of 2017 with the prices charged for the same coverage during the same quarter of 2016. For the most recent survey, 39 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.

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