Prices increased once again in Q4-2018
Prices for commercial insurance continued to rise in the Fourth Quarter of 2018 says the latest CLIPs or Commercial Lines Insurance Pricing Survey from Willis Towers Watson. According to the data, the aggregate commercial price change reported was in excess of 1% during the four quarters of 2018. Compared Q4-2018 and Q4- 2017, the aggregate price change, came in at just under 2%.
“Price increases for the fourth quarter were primarily modest, yet sustaining the level reported throughout 2018,” said Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson. “Also, the uptick in carriers’ reported claim cost inflation for 2018 may be contributing to upward pressure on rates.”
Major take-aways from this quarter’s survey
The following are some of the other major takeaways Towers Willis Watson highlighted for this quarter:
- Data for three standard lines indicated material price increases in the third quarter; commercial auto, commercial property, and excess/umbrella liability.
- Price changes for most lines were similar to those reported in the third quarter of 2018.
- Commercial property price data, which had been showing small price decreases for much of 2017, indicted price increases in excess of 4% for all four quarters of 2018. ‘
- The outlier in the results continues to be commercial auto, where significant price increases are again reported and are at or near double digits for the fifth consecutive quarter.
- CLIPS indicates ongoing material price reductions for workers compensation, in contrast to all other surveyed lines.
Willis Towers Watson notes that “participating companies indicate elevated levels of claim cost inflation in aggregate for 2018, with estimates above 4% on an earned basis, compared to estimates below 2% for 2017, which translates to nearly equivalent levels of indicated loss ratio deterioration.”
A visual representation of commercial pricing changes during the Fourth Quarters of the past 15 years
For a clearer picture of how commercial lines pricing has shifted in pricing during the various fourth quarter periods over the past 15 years.
More about CLIPS
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.
