Accelerating 2018 Q2 commercial lines prices unmatched since mid-2014

Commercial insurance prices accelerated in the second quarter of 2018, according to Willis Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the second quarter of 2018 to those charged for the same coverage during the same quarter in 2017. The aggregate commercial price change reported by carriers was nearly 3% in the second quarter, after exceeding 1% for the first time in nearly three years in the preceding quarter. Aggregate price increases of this magnitude have not been reported since mid-2014.

Data for three standard lines indicated material price increases in the first quarter; commercial auto, commercial property, and excess/umbrella liability. Price changes for nearly all lines were higher in the second quarter than those reported in the first quarter of 2018. Commercial property price data, which had been showing small price decreases for much of the recent past, now indicates increases in the low to mid-single digits for the third consecutive quarter. The outlier in the results continues to be commercial auto, where meaningful price increases are again reported and are at or near double digits for the third consecutive quarter. CLIPS indicates ongoing material price reductions for workers compensation, in contrast to all other surveyed lines.

When comparing account sizes, price changes were positive and nearly identical across all segments, as mid-market and large accounts pricing data caught up to the recently larger increases reported for small accounts. Specialty account prices increased as well, but more modestly than the standard commercial lines.

Change in price level vs. same quarter one year prior