U.S. commercial insurance carriers report aggregate price changes of over 6% for Q1
U.S. commercial insurance prices increased significantly during the first quarter of 2020 compared with prices charged during the first quarter of 2019, according to leading global advisory, broking and solutions company Willis Towers Watson's (NASDAQ:WLTW) Commercial Lines Insurance Pricing Survey. The aggregate price change reported by carriers exceeded 6% for the second consecutive quarter.
Data for nearly all lines indicated a rise in prices, some significant, with double-digit increases for directors' and officers' liability, excess/umbrella, commercial auto and property. For most other lines, price changes were consistent with those observed in the prior quarter. When comparing account sizes, price changes varied: muted for small commercial accounts and higher across mid-market accounts, with large accounts nearing double digits.
"During the first quarter of 2020 we saw a continuation of substantial price increases for excess/umbrella and directors' and officers' liability," said Alejandra Nolibos, senior director, Insurance Consulting and Technology, Willis Towers Watson. "Focusing on workers compensation, carriers reported reductions once again. That said, first quarter statistics are unlikely to reflect reactions to the short and midterm impacts of COVID-19, among them changes in task and employment mix and the economic situation. Ongoing analyses of detailed data on emergence and exposures, coupled with carriers' outlooks for the environment and a refreshed interest in the role of systemic events in this class, will be important determinants of premium trends in the future."
CLIPS is a retrospective look at historical changes in commercial property and casualty insurance (P&C) prices and claim cost inflation. A forward-looking analysis of commercial P&C trends, outlook and rate predictions can be found in Willis Towers Watson's Insurance Marketplace Realities series.
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 45,000 employees serving more than 140 countries and markets. 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 willistowerswatson.com.
CLIPS data are based on both new and renewal business figures obtained directly from carriers underwriting the business. CLIPS participants represent a cross section of U.S. P&C insurers that includes many of the top 10 commercial lines companies and the top 25 insurance groups in the U.S. This survey compared prices charged on policies written during the first quarter of 2020 with the prices charged for the same coverage during the same quarter of 2019. For this most recent survey, 38 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.
Ileana Feoli: +1 212 309 5504