U.S. commercial insurance rates maintain predictable trend; highlighted by aggregate rise of 6.3% for Q1’2024
June 10 2024 - 10:39AM
According to WTW, a leading global advisory, broking and solutions
company, U.S. commercial insurance prices have maintained a steady
trend with respect to consistent, routine, price increases. Based
upon the company’s Commercial Lines Insurance Pricing Survey
(CLIPS) for the first quarter of 2024, quarterly price increases of
approximately 6% have remained steady since the global pandemic.
The survey compares insurance prices on policies underwritten
during the first quarter of 2024 to those prices for the same
coverage in the same respective quarter of 2023 for a
year-over-year perspective.
The commercial lines insurance price change
reported by carriers participating in the CLIPS study demonstrated
an overall increase of 6.3% for the first quarter of 2024, nearly
identical to the rate for the fourth quarter of 2023 for the same
group of participants.
Drilling down into specific commercial coverage
areas contributing to the aggregate quarterly rate result, some
coverages stand out. For example, Excess Umbrella Liability
coverage has shown significant price increases over the last few
years. Throughout that time, the fourth quarter of 2022 indicated
the lowest rate increase (single digits) when compared to the other
quarters within that time window. From early 2023 to the present,
this coverage area has jumped back up to double-digit quarterly
price increases.
When considering Commercial Property rate
activity, from the first quarter of 2021 through the fourth quarter
of 2022, quarterly rate increases had slowed to single digits.
However, since that time, rates have begun experiencing increases
and remained at double-digit increases for the last five
quarters.
In evaluating the cyber insurance market from
the CLIPS survey data, Cyber, after having significant price
increases from mid-2020 to the third quarter of 2022, has seen
price decreases in the last few quarters with the most recent one
moving into a single-digit price decrease. Since mid-2022, when the
Directors & Officers Liability (D&O) market began shifting
from hard to soft, the price decreases reached double-digit levels,
while recent data shows that the D&O market has now stabilized
with low to mid-single digit decreases.
As economic inflation begins to show signs of
slowing down throughout the U.S. economy, its impact is
contributing to the variations in commercial insurance rates for
corporations.
“Rates continued to harden across many coverage
lines in the first quarter of 2024, but have slowed somewhat from
the previous quarter, with the exception of excess/umbrella
liability, where we saw an acceleration of rate increases since the
first quarter of 2023,” said Yi Jing, Senior Director, Insurance
Consulting and Technology (ICT), WTW.
CLIPS is a retrospective look at historical
changes in commercial property & casualty insurance (P&C)
prices and claims cost inflation. A forward-looking analysis of
commercial P&C trends, outlook, and rate predictions for the
upcoming quarter can be found in WTW’s Insurance Marketplace
Realities series (published twice per year, every spring and
fall).
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.
P&C insurers that includes many of the top 10 commercial lines
companies and the top 25 insurance groups in the U.S. This survey
compared prices charged on policies written during the third
quarter of 2023 with the prices charged for the same coverage
during the same quarter of 2022. For this most recent survey, 43
participating insurers representing approximately 20% of the U.S.
commercial insurance market (excluding state workers compensation
funds) contributed data.
About Insurance Consulting and
Technology
WTW’s Insurance Consulting and Technology
business serves the insurance industry with a powerful combination
of advisory services and leading-edge technology. Our mission is to
innovate and transform insurance, and we deliver solutions that
help clients better select, finance, and manage risk and
capital.
We work with clients of all sizes globally,
including most of the world’s leading insurance groups. Over 1,000
client companies use our specialist insurance software on six
continents. With over 1,700 colleagues in 35 markets, we
continually strive to be a partner and employer of choice to the
insurance industry.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven,
insight-led solutions in the areas of people, risk and capital.
Leveraging the global view and local expertise of our colleagues
serving 140 countries and markets, we help organizations sharpen
their strategy, enhance organizational resilience, motivate their
workforce and maximize performance. Working shoulder to shoulder
with our clients, we uncover opportunities for sustainable
success—and provide perspective that moves you.
Media Contact
Douglas MenellyDouglas.Menelly@wtwco.com +1 (516) 972 0380
Arnelle SullivanArnelle.Sullivan@wtwco.com +1 (718) 208-0474
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