Research

Survey shows increase in Q1 2019 U.S. commercial insurance prices

Commercial Lines Insurance Pricing Survey Q1 2019

June 10, 2019
| Bermuda, United States

U.S. commercial insurance prices again increased in the first quarter of 2019, 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 2019 to those charged for the same coverage during the same quarter in 2018. The aggregate commercial price change reported by carriers was close to 2% for all four quarters of 2018, and came in just above 2% in the first quarter of 2019.

Data for four standard lines indicated material price increases in the first quarter; commercial auto, commercial property, excess/umbrella liability, and directors and officers liability. Price changes for most lines were similar to or slightly above those reported in the fourth quarter of 2018. Directors and officers liability data had been indicating modest price increases for all of 2018, and now indicates price increases in the mid-single digits in the latest quarter. The outlier in the results continues to be commercial auto, where significant price increases are again reported and are in the double digits for the fourth consecutive quarter. CLIPS indicates ongoing material price reductions for workers compensation, in contrast to nearly all other surveyed lines.

When comparing account sizes, price changes were positive and of reasonably similar magnitude across all segments for the fourth consecutive quarter, as opposed to 2017 where mid-market and large accounts price changes were generally flat. Specialty account prices increased modestly for all four quarters of 2018, and trended upward somewhat in the first quarter of 2019.

While still elevated versus recent prior years, companies have revised their estimates of claim cost inflation in aggregate for 2018 to just above 3%, which translates to nearly equivalent levels of indicated loss ratio deterioration.

Change in price level vs. same quarter one year prior

Graphic showing the change in price level vs same quarter one year prior