The Latest Commercial Lines Insurance Pricing Survey focuses on Q2-2019
U.S. Commercial insurance prices were up almost 4% during the second quarter of 2019 says the latest Commercial Lines Insurance Pricing Survey (CLIPS). This percentage increase, measured by comparing Q2-2019 prices versus those charged in Q2-2018, is a “significant pickup” in increased prices of the previous five quarters which saw increases closer to 2%.
“After so many quarters of modest increases we are seeing a pickup, backing up general market sentiment,” said Alejandra Nolibos, senior director, Insurance Consulting and Technology business, Willis Towers Watson. “Adverse loss trends in auto and D&O, and deteriorating or potentially deteriorating loss trends in other casualty lines, together with the prospect of potentially diminishing reserve releases seems to have pushed carriers to demand higher prices.”
Major take-aways from this quarter’s CLIPS survey
- Prices for most lines showed increases, with property, excess/umbrella, and directors and officers (D&O) approaching double digits for the first time in several years.
- Commercial auto, the past outlier in the results, saw reported price increases near or above double digits for the seventh consecutive quarter.
- Price changes trended upward for all account sizes, though more significantly for mid-market and large accounts.
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.
Ivans Premium Renewal Rate Survey
The August results of the IVANS Index™, also show an uptick across nearly all of the commercial lines products, except Business Owners Policy which experienced a slight negative change. Year over year, the Index shows that all lines of business experienced positive premium renewal rate, except for Worker’s Compensation which remains negative.
Premium renewal rate change by line of business for August 2019 highlights include:
- Commercial Auto: 4.49%, up from 4.03% last month.
- BOP: 4.15%, down from 4.28% at the end of July.
- General Liability: 2.6%, up from 2.2% the month prior.
- Commercial Property: 4.14%, up from 4.12% in July.
- Umbrella: 2.92%, up from 2.72% the month prior.
- Workers’ Compensation: -2.49%, up from -3.05% last month.
“As premium renewal rates are climbing month over month, we see the market continuing to harden,” said Brian Wood, vice president of Data Products Group, IVANS Insurance Services. “This month’s IVANS Index shows increased premium pricing strategies by insurers, providing meaningful data for agencies to use during their renewal conversations with customers.”
