A survey by Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS) has revealed a slight increase in U.S commercial insurance prices in the fourth quarter of 2017, compared with the previous year.
The survey found that price changes continued to average less than 1% for the 10th consecutive quarter, following a moderating trend in price increases which has been observed since the first quarter of 2013.
CLIPS compared the prices for policies written in the fourth quarter of 2017 with prices for the same coverage in the fourth quarter of 2016.
Although price changes were generally positive, commercial auto showed by far the largest growth, with price increases nearing double digits.
Commercial property prices also saw a notable increase which, although slight, broke with the sector’s trend of price decreases in recent years, possibly in reaction to third quarter catastrophe activity.
On the other hand, Willis reports that both workers compensation and directors and officers (D&O) liability showed material price decreases in the fourth quarter of 2017, driven by large price reductions in workers compensation.
In terms of account sizes, price changes were positive across all segments, with large accounts tending to shift from modest aggregate reductions to modest aggregate increases.
Pierre Laurin, Americas Property & Casualty (P&C) Sales and Practice Leader for Insurance Consulting and Technology at Willis Towers Watson, said: “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.
“Further, commercial auto rate increases show no signs of abatement, as insurers seek to restore the line to a profitable rate level.”