Survey reveals commercial insurance prices were nearly flat during the first quarter of 2016
Arlington, VA (July 12, 2016) – Commercial insurance prices were again nearly flat during the first quarter of 2016, according to Willis Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the first quarter of 2016 to those charged for the same coverage during the same quarter in 2015. Price changes reported by carriers were nearly flat for the third consecutive quarter, following a moderating trend in price increases that began in the first quarter of 2013.
Change in price level versus same quarter one year prior
(Willis Towers Watson June 2016 Commercial Lines Insurance Pricing Survey)
In general, price changes in the first quarter for most lines of business were fairly consistent with changes reported in the fourth quarter. Also consistent with the fourth quarter, three lines (workers compensation, commercial property, and directors and officers) reported modest price decreases.
The outlier in the results continues to be commercial auto, where meaningful price increases continue to be reported and have even mildly accelerated over the past three quarters. Price changes for most other lines fell in the low single digits. When comparing account sizes, price increases were nearly flat for large accounts for the sixth consecutive quarter and nearly flat for mid-market accounts for the fifth consecutive quarter. Small commercial accounts moderated somewhat and are nearly flat as well. Specialty account price changes in aggregate were slightly negative for the second consecutive quarter.
Historical claim cost information reported by participating carriers points to flat loss ratios in both accident-year 2015 relative to the same period in 2014 as well as in accident-year 2016 to date, as earned price increases offset benign reported claim cost inflation for many lines.
About the survey
The Willis Towers Watson Global Medical Trends Survey was conducted between October and November 2015, and reflects responses from 174 leading medical insurers operating in 55 countries. Most participants have at least a 10% share of the group medical insurance market in their country.
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 39,000 employees in more than 120 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 www.willistowerswatson.com.Tags: CLIPS, Willis Towers Watson