Commercial insurers, like many other businesses are facing difficult economic times, fraught with uncertainty — which has had a significant impact on pricing over the last year.
According to the latest Commercial Lines Insurance Pricing Survey (CLIPS) from global advisory, broking and solutions company Willis Towers Watson, commercial insurance prices in the U.S. were nearly flat for the fifth straight quarter. The survey compared prices charged on policies written during the fourth quarter of 2016 to those charged for the same coverage during the equivalent quarter in 2015.
The survey found that most price changes were comparable with those reported in the third quarter 2016. Data for workers' compensation and commercial property lines, however, showed modest price decreases, while data on the directors and officers line indicated more significant price reductions.
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Commercial auto an outlier
Commercial auto, on the other hand, once again had "meaningful" price increases. For most other lines, price increases were in the low single digits. Price changes were fairly similar across segments, the survey shows, though slightly negative for large accounts and marginally positive for small and mid-market ones.
"The rapid growth in the rate of price increases seen in 2012 has since slowed for much of the commercial market, but not for commercial auto. This line's cumulative price increase since 2012 is over 25 percent, compared to about 10 percent for the surveyed commercial market as a whole," said Alejandra Nolibos, director in Willis Towers Watson's Americas Property & Casualty Insurance practice. "Loss experience has been benign for many of the other lines, but the dynamics of the auto business are changing quickly and dramatically, ultimately driving challenging results and rate need for the line."
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