Commercial insurance prices rose an aggregate 2 percent from a year earlier during the first three months of 2015, the same pace as in the previous quarter, according to the latest Commercial Lines Insurance Pricing Survey conducted by global professional services company Towers Watson.
Price increases for most insurance lines were in the low single digits, led by commercial auto and employment practices liability, the survey showed. But gains for EPL and commercial property prices continued to slow. Prices for large accounts increased at a lower rate than small and mid-market accounts.
Carriers reported an improvement of 2 percent in loss ratios in accident-year-to-date 2015 from a year earlier, as “earned price increases continue to offset reported claim cost inflation for many lines. This builds on the estimated improvement of nearly 2 percent between 2013 and 2014,” Towers Watson said.
“Price increases are barely offsetting loss cost inflation in some lines,” added Alejandra Nolibos, a director with Towers Watson’s property & casualty insurance practice, in a press release. “We may start to see pressure on the bottom line as reserve redundancies dry up.”
CLIPS data are based on both new and renewal business figures obtained directly from carriers underwriting the business, Towers Watson said. Participants represent a cross section of US property & casualty insurers that includes many of the top 10 commercial lines companies and the top 25 insurance groups in the country.
This survey compared prices charged on policies underwritten during the first quarter of 2015 to the those charged for the same coverage in the year-earlier period. Data were contributed by 44 insurers representing approximately 20 percent of the US commercial insurance market (excluding state workers compensation funds).
