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Survey shows that Q1 2020 U.S. commercial insurance prices increase over 6% again

Commercial Lines Insurance Pricing Survey 2020 Q1

Insurance Consulting and Technology

June 8, 2020

Willis Towers Watson’s Q1 Commercial Lines Insurance Pricing Survey again indicates significant upward price adjustments for multiple lines.

U.S. commercial insurance prices again grew significantly in the first quarter of 2020, according to Willis Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the first quarter of 2020 to those charged for the same coverage during the same quarter in 2019. The aggregate commercial price change reported by carriers was close to 2% for all four quarters of 2018 and the first quarter of 2019, climbing to almost 4% in the second quarter, almost 5% in the third quarter of 2019, and over 6% for the past two quarters.

Line of business price changes

Data for nearly all lines indicated significant price increases in the first quarter, with the largest coming from excess/umbrella liability and directors and officers liability, as both coverages saw significantly accelerating increases over the past three quarters. The past outlier in the results, commercial auto, saw reported price increases near or above double digits for the tenth consecutive quarter, while property coverage saw near double digit increases for the fourth consecutive quarter. Price changes for most lines other lines were fairly consistent with those observed in the prior quarter. Directors and officers liability data had been indicating modest price increases for all of 2018, followed by sharp adjustments upward the past five quarters. CLIPS indicates ongoing material price reductions for workers compensation, in contrast to nearly all other surveyed lines, though the decreases have tempered somewhat for each of the last five quarters.

Account size price changes

When comparing account sizes, reported price changes were more muted for small commercial accounts, higher for mid-market accounts, and approaching double digits for large accounts, whereas the prices were fairly consistent by account size four quarters ago. Specialty lines price increases in aggregate were above double digits increases for the second consecutive quarter.

For more information about CLIPS, contact:

Jacob Roe

Alejandra Nolibos
Senior Director

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