Carriers report aggregate price increases of over 2%
Carriers have reported that the aggregate commercial price change for the Third Quarter of 2018 (Q3-2018) mirrors those of Q2-2018, with price increases of over 2%. This trend also marks the first time prices have surpassed 2% after the second quarter of 2018 in three years.
“A second quarter of meaningful price increases may signal a reaction to the much talked about emergence of unfavorable loss trends beyond auto,” said Ben Williams, director, Insurance Consulting and Technology, Willis Towers Watson. “As in the past, and perhaps not surprisingly, increases in small accounts seem to have acted as a leading indicator: Middle market and large accounts are catching up with larger increases this quarter.”
A visual representation of commercial pricing changes during the third 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 various third quarter periods in the years from 2003-2018:
Other 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 most lines were similar to those reported last quarter.
- Three lines — commercial auto, commercial property and excess/umbrella liability — showed material price increases.
- Workers compensation reported ongoing material price reductions in contrast to all other surveyed lines.
- When comparing the survey results by account size, price changes were once again positive and of similar magnitude across all segments.
- Mid-market and large account price adjustments caught up to the recently larger increases reported for small accounts.
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 a specific quarter as compared to prices of policies for the same coverage during the prior year. 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.
