Tag Archives: Commercial Insurance Rates

Eye on commercial insurance prices

Despite ample capital and benign claim cost trends, insurers have held the line on trading profitability for volume, while still responding as needed to emerging trends, according to Willis Towers Watson.

Its most recent Commercial Lines Insurance Pricing Survey (CLIPS) shows that commercial insurance prices in the U.S. were nearly flat in the first quarter of 2017.

Price changes reported by carriers averaged less than 1 percent for the sixth consecutive quarter.

Four lines (workers compensation, commercial property, directors and officers, and surety) showed modest price decreases.

Commercial auto remains the outlier with meaningful price increases reported.

Commercial Insurance Prices Moving On Up

Insurers are moving away from the rate cuts of 2016, according to online insurance exchange MarketScout’s take on the first quarter 2017 rate environment.

For the first time in 20 months, the composite rate index for commercial accounts in the United States measured a rate increase at plus 1 percent, MarketScout said.

Richard Kerr, CEO of MarketScout:

“The plus 1 percent composite rate index was driven by larger rate increases in commercial auto, transportation, professional and D&O rates. We also recorded small rate increases in the majority of coverage and industry classifications.”

Rates for business interruption, inland marine, workers’ compensation, crime, and surety coverages held steady in the first quarter. Rates for all other coverages either moderated or increased.

By industry class, every industry experienced a move toward higher rates in the first quarter. Transportation had the largest rate increase at plus 5 percent, MarketScout reported.

Small accounts (up to $25,000) were assessed a 1 percent rate increase in the first quarter of 2017. Medium accounts ($25,001 – $250,000) were flat while both large ($250,001 – $1 million) and jumbo (over $1 million) accounts enjoyed rate decreases of minus 1 percent and minus 2 percent respectively.

Check out Insurance Information Institute facts and statistics on the commercial lines insurance market here.

Eye On Commercial Insurance Prices

Two broker surveys give insight on where U.S. commercial insurance prices are at.

Willis Towers Watson’s most recent Commercial Lines Pricing Survey (CLIPS) shows commercial insurance prices were again nearly flat during the fourth quarter of 2016:

As you can see above, price changes reported by carriers were less than 1 percent for the fifth consecutive quarter, following a moderating trend in price increases that began in the first quarter of 2013.

The outlier in the results? Commercial auto, where meaningful price increases continue to be reported. Price changes for most other lines fell in the low single digits, according to the CLIPS survey.

Meanwhile, the Marsh Global Insurance Market Index Q4 2016 found that U.S. composite insurance rates were down 3 percent in the fourth quarter of 2016, in line with the global rate:

Marsh said the continuing decline in U.S. commercial insurance prices was driven largely by decreases in property insurance pricing.

However, U.S. cyber liability rates continued to increase for the sixth consecutive quarter, albeit at a moderating rate, Marsh noted.

Cyber price increases don’t appear to be deterring businesses from buying this essential coverage.

The number of Marsh clients purchasing cyber insurance increased by 25 percent from 2015 to 2016 across all industries, with the greatest overall uptake in healthcare, communications, media and technology.

See more on the importance of cyber insurance to businesses in this Insurance Information Institute (I.I.I.) white paper.

Significant trends shaping the property/casualty insurance business are discussed in this I.I.I. presentation.