Wednesday, September 14, 2011
Commercial insurance prices are showing a small increase for the first time in nearly eight years, according to Towers Watsonâ€™s latest Commercial Lines Insurance Pricing Survey (CLIPS).
It showed that commercial insurance prices in aggregate increased by nearly 1.5 percent during the second quarter of 2011 â€“ the first uptick since the fourth quarter of 2003.
The findings are consistent with preliminary results of a soon-to-be-released Towers Watson survey, which reveal that 75 percent of CFOs believe standard property market prices are at the bottom or turning upward. Further, 80 percent of CFOs believe the casualty market is within two years of hardening.
While itâ€™s too early to definitively call this a hardening market, Towers Watson said all the signs are pointing in that direction.
Findings from CLIPS indicate the increase was led by workers compensation, which continued the trend of pricing increases that began in the first quarter of this year, and commercial property, which increased for the first time in more than a year.
Directors and Officers (D&O)Â liability was the only line that continued to show significant pricing declines.
Towers Watsonâ€™s survey follows online insurance exchange MarketScout’s report that the composite rate for U.S. property and casualty insurance was minus 2 percent in August, matching the rate set in July.
Richard Kerr, CEO of MarketScout said:
Property rates are continuing to firm. In July 2011, the composite rate for all property placed in the U.S. adjusted from minus 2 percent to flat. This includes new and renewal business on both cat and non-cat exposed property.