CLIPS is Willis Tower Watson’s quarterly U.S. Commercial Lines Pricing & Profitability Survey
Commercial insurance prices across the country saw almost a 3% increase during the Q2-2018, according to the latest Commercial Lines Insurance Pricing Survey (CLIPS). It has been nearly four years since price changes of this magnitude have been reported.
“Almost all lines show a more rapid pace of price increases,” said Ben Williams, director, pricing, product, claims and underwriting practice, North America, Willis Towers Watson. “Notably, mid-market and large accounts prices have recently seen the largest increases. This is fodder for thought, as the history of CLIPS suggests that larger accounts have been leading indicators of market adjustments.”
A visual representation of commercial pricing changes during the second quarter of the past 15 years
For a clearer picture of how commercial lines pricing has shifted, the following graph depicts the movement in pricing during the second quarters of the years 2003-2018:
Take-aways from this quarter’s survey
The following are some of the other major takeaways Towers Willis Watson highlighted for this quarter:
- Price changes for nearly all lines were higher in the second quarter compared to those reported in the first quarter of 2018.
- Commercial auto, commercial property and excess/umbrella liability all indicated material price increases.
- Commercial property price data, which had been showing small price decreases recently, now shows increases in the low- to mid-single digits for the third consecutive quarter.
- Commercial auto continues to be the outlier, with meaningful price increases at or near double digits for the third consecutive quarter.
- CLIPS data indicate that workers compensation is the only standard surveyed line with ongoing price reductions.
- When comparing the survey results by account size, price changes were positive and nearly identical across all segments, as mid-market and large account commercial price change data caught up to the recently larger increases reported for small accounts.
A little more about CLIPS
The CLIPS study is conducted and compiled each quarter by Willis Tower Watson, from information obtained directly from carriers. It compares prices charged on policies from Q2-2018 as compared to prices of policies for the same coverage during the same quarter of 2017. In addition to providing “a retrospective look” at the historical changes in commercial P&C prices, it also take a look at claim cost inflation as well.
