ARLINGTON, Va.--(BUSINESS WIRE)--Commercial insurance prices were nearly flat (0.8% increase) in aggregate during the third quarter of 2015, continuing a trend of tempering increases that began in the first quarter of 2013, according to the latest Commercial Lines Insurance Pricing Survey (CLIPS) conducted by global professional services company Towers Watson (NASDAQ: TW). The survey compared prices charged on policies underwritten during the third quarter of 2015 to those charged for the same coverage during the same quarter of 2014.
Consistent with the previous quarter’s findings, workers compensation, commercial property, and directors and officers reported price decreases in the third quarter. Employment practices liability showed the largest price increases of lines surveyed, followed by commercial auto. For most of the other lines surveyed, price increases continued to moderate. Prices for large accounts decreased for the second consecutive quarter, while small and mid-market accounts see more moderate increases than in the prior survey.
“Workers compensation, and directors and officers saw price decreases again during the third quarter,” said Alejandra Nolibos, a director with Towers Watson’s Property & Casualty Insurance practice. “For workers compensation in particular, moderate cost trends could turn quickly with a rise in inflation. The compounded effect on claims that won’t come off the books for years to come could offset prior gains.”
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. property & casualty 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 underwritten during the third quarter of 2015 to the prices charged for the same coverage during the same quarter of 2014. For the most recent survey, data were contributed by 43 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds).
About Towers Watson
Towers Watson (NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 16,000 associates around the world, the company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Learn more at towerswatson.com.