Commercial Insurance Prices Rise 4% in the First Quarter of 2014, Though Increases Are Moderating
June 09 2014 - 9:05AM
Business Wire
Price increases drop 1% compared to prior quarter; lowest
level of growth since Q4 2011
Commercial insurance prices increased by 4% in aggregate during
the first quarter of 2014, according to the latest Commercial Lines
Insurance Pricing Survey (CLIPS) conducted by global professional
services company Towers Watson (NYSE, NASDAQ: TW). Although prices
continued growing, the increases are the smallest in over two years
— a full percentage point lower than last quarter, and a steep
decrease from the 6% to 7% reported in the second half of 2012 and
first half of 2013. The survey compares carriers’ pricing on
policies underwritten during the first quarter of 2014 to those
underwritten in the same quarter of 2013.
Prices increased for every line of business, with most in the
low- to mid-single digits. Increases were lower than those reported
in the fourth quarter, however, with the exception of professional
liability. Employment practices liability experienced the largest
price increase year over year, with excess/umbrella liability and
commercial auto also showing substantial increases. The survey did
not reveal significant differences between small, mid-market and
large accounts. Specialty pricing increased at a lower rate than
pricing for standard lines, but the price increase ticked up
slightly from the prior quarter.
According to respondents, loss ratios improved 2% for
accident-year-to-date 2014 relative to the same period in 2013
(excluding catastrophes), as earned price increases continued to
more than offset low claim cost inflation. This development builds
on the estimated improvement of nearly 5% between 2012 and 2013. In
aggregate, carriers reported approximately 1% claim cost inflation
for 2013 and 2% for 2014.
“Price increases continue to decline. First quarter increases
are one percentage point lower than last quarter, following several
quarters of a moderate but steady slide,” said Tom Hettinger,
Towers Watson’s Property & Casualty sales and practice leader
for the Americas. “On the other hand, the resiliency of price
increases is consistent with our view of the market’s focus on the
management of risk, the uncertain inflationary environment and
still-low fixed-income investment yields. Price increases may be
mitigating, but they’re still outpacing claim inflation.”
About CLIPS
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. property &
casualty insurers that includes many of both the top 10 commercial
lines companies and the top 25 insurance groups in the U.S. This
particular survey compared prices charged on policies underwritten
during the first quarter of 2014 to the prices charged for the same
coverage during the same quarter in 2013. For the most recent
survey, data were contributed by 43 participating insurers
representing approximately 20% of the U.S. commercial insurance
market (excluding state workers compensation funds).
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global
professional services company that helps organizations improve
performance through effective people, risk and financial
management. The company offers consulting, technology and solutions
in the areas of benefits, talent management, rewards, and risk and
capital management. Towers Watson has more than 14,000 associates
around the world and is located on the web at towerswatson.com.
Towers WatsonJosh Wozman, +1 703-258-7670josh.wozman@towerswatson.comorBinoli Savani, +1
703-258-7648binoli.savani@towerswatson.com
Trustwave Holdings (MM) (NASDAQ:TWAV)
Historical Stock Chart
From Jun 2024 to Jul 2024
Trustwave Holdings (MM) (NASDAQ:TWAV)
Historical Stock Chart
From Jul 2023 to Jul 2024