Insurance and reinsurance broker Willis Towers Watson (WTW) has reported that U.S. commercial insurance prices “increased significantly” in the first-quarter of 2020 when compared with the same period in 2019.
Continuing the momentum witnessed in the final quarter of last year, the aggregate price change reported by U.S. carriers exceeded 6% in Q1 2020, according to WTW’s most recent Commercial Lines Insurance Pricing Survey (CLIPS).
The survey compares prices charged on policies underwritten during Q1 2020 to those charged for the same coverage in Q1 2019.
WTW notes that the aggregate commercial price change reported by insurers was close to 2% for all of 2018 and the opening quarter of 2019, reaching almost 4% in Q2 2019 and 5% in Q3 2019, and more than 6% for both Q4 2019 and Q1 2020.
According to the data, nearly all lines indicated a rise in prices during the quarter, with some being more significant than others. Double-digit rate increases occurred in directors’ and officers’ liability, excess/umbrella, commercial auto, and property. For the majority of other lines, says WTW, price changes were consistent with those reported in Q4 2019.
By account size, and the latest CLIPS reveals that reported price changes were more muted for small commercial accounts, higher for mid-market accounts, and approaching double-digits for large accounts. In addition, the broker notes that specialty lines price increases in aggregate were above double-digit increases for the second quarter in a row.
Alejandro Nolibos, senior director, Insurance Consulting and Technology, WTW, commented: “During the first quarter of 2020 we saw a continuation of substantial price increases for excess/umbrella and directors’ and officers’ liability.
“Focusing on workers compensation, carriers reported reductions once again. That said, first quarter statistics are unlikely to reflect reactions to the short and midterm impacts of COVID-19, among them changes in task and employment mix and the economic situation.
“Ongoing analyses of detailed data on emergence and exposures, coupled with carriers’ outlooks for the environment and a refreshed interest in the role of systemic events in this class, will be important determinants of premium trends in the future.”