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Survey Report

Q1 2021 U.S. commercial insurance prices indicated a significant increase although lower than previous quarters

Commercial Lines Insurance Pricing Survey 2021 Q1

Insurance Consulting and Technology
N/A

June 8, 2021

Willis Towers Watson’s Q1 Commercial Lines Insurance Pricing Survey again indicates significant rate increases for multiple lines.

U.S. commercial insurance prices again grew significantly in the first quarter of 2021, 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 2021 to those charged for the same coverage during the same quarter in 2020. The aggregate commercial price change reported by carriers grew by over 6% for the fourth quarter of 2019 and first quarter of 2020, and then spiked upward to nearly and above 10% in the second through the fourth quarters of 2020 and now just below 8% in the first quarter of 2021.

Line of business price changes

Data for nearly all lines indicated significant price increases in the 1st quarter but lower than the price increases from the 4th quarter of 2020. The largest price increases still come from excess/umbrella liability and directors and officers liability, both coverages saw significantly accelerating prices over the previous five quarters. However compared to the 4th quarter of 2020, these two coverages have the largest reduction in price increases. Commercial auto saw reported price increases near or above double digits for the fourteenth consecutive quarter, while property coverage accelerated again and saw near or above double digit increases for the eighth consecutive quarter. Directors and officers liability data had been indicating modest price increases for all of 2018, with sharp adjustments upward in the past nine quarters. CLIPS continues to indicate a slight price reduction for workers compensation, in contrast to nearly all other surveyed lines, though the decreases have tempered somewhat for each of the last nine quarters.

Account size price changes

When comparing account sizes, reported price changes were more muted for small commercial accounts, slightly below double digits for mid-market accounts, and above double digits for large accounts and specialty lines, whereas the prices were fairly consistent by account size seven quarters ago.

The aggregate commercial price change - Description below
reported by carriers grew by over 6% for the first quarter of 2020 and now just below 8% in the first quarter of 2021
Change in price level vs. same quarter one year prior
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Yi Jing
Director

Alejandra Nolibos
Senior Director

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