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Press Release

U.S. commercial insurance prices increase during the fourth quarter of 2018

Insurance Consulting and Technology
Insurer Solutions

March 11, 2019

U.S. commercial insurance prices increase during the fourth quarter of 2018.

ARLINGTON, VA, March 11, 2019 — U.S. commercial insurance prices rose again in the fourth quarter of 2018, according to leading global advisory, broking and solutions company, Willis Towers Watson’s (NASDAQ: WLTW), Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the fourth quarter of 2018 to those charged for the same coverage during the same quarter in 2017. The price change reported by carriers for the quarter was just under 2%.

Price changes for most lines were similar to those reported last quarter. Commercial property prices, which had been showing small price decreases for much of 2017, indicated price increases in excess of 4%. For the fifth consecutive quarter, commercial auto showed significant price increases at or near double digits. Ongoing material price reductions for workers compensation were reported, in contrast to all other surveyed lines. Price changes were positive and of reasonably similar magnitude across all account sizes. Early reports of 2018 claim cost inflation indicate higher cost increases than in 2017.

“Price increases for the fourth quarter were primarily modest, yet sustaining the level reported throughout 2018,” said Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson. “Also, the uptick in carriers’ reported claim cost inflation for 2018 may be contributing to upward pressure on rates.”

CLIPS is a retrospective look at historical changes in commercial property & casualty (P&C) prices and claim cost inflation. A forward-looking analysis of commercial P&C trends, outlook and rate predictions can be found in Willis Towers Watson’s Marketplace Realities series.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for gth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.

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 particular survey compared prices charged on policies written during the fourth quarter of 2018 with the prices charged for the same coverage during the same quarter of 2017. For the most recent survey, 39 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.

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