Another day, another commercial lines pricing survey. This one via Towers Watson.
Commercial insurance prices increased by 5 percent in aggregate during the third quarter of 2013, according to Towers WatsonÃ¢â‚¬â„¢s latest Commercial Lines Insurance Pricing Survey (CLIPS),
While this marked the 11th consecutive quarter of price increases, the gains appear to be tapering off, dropping a point since the CLIPS edition a year ago, Towers Watson said.
The survey compares carriersÃ¢â‚¬â„¢ pricing on policies underwritten during the third quarter of 2013 to those underwritten in the same quarter of 2012.
Price increases by line of business were lower than those reported in the second quarter in all lines, with the exception of employment practices liability.
Employment practices liability experienced the largest price increase year over year, with price increases spiking into double digits, followed distantly by workers compensation and commercial auto.
Prices for most lines of commercial insurance showed gains in the mid-single digits, while none of the classes surveyed reported a price drop, according to Towers Watson.
A press release quotes Tom Hettinger, Towers WatsonÃ¢â‚¬â„¢s Property & Casualty sales and practice leader for the Americas:
This hard market is somewhat different from hard markets we have experienced before. Carriers are taking rate, which is logical, as they focus on measuring the capital required to support the business rigorously and realistically, and adjust their return expectations accordingly.Ã¢â‚¬
Hettinger added that loss cost trends are benign Ã¢â‚¬“ in fact, carriers are reporting flat loss costs.
Survey respondents reported that loss ratios have improved between 3 percent and 6 percent for accident-year 2013 relative to 2012 (excluding catastrophes), as earned price increases more than offset stagnant reported claim cost inflation.
For the most recent survey, data were contributed by 43 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds).
Check out I.I.I. facts and statistics on commercial lines.