Commercial insurance costs in the US rose by five per cent in aggregate during the fourth quarter of 2013, according to figures included in the Commercial Lines Insurance Pricing Survey (CLIPS). It was conducted by Towers Watson, a professional services company. This is the third consecutive year of price increases in the US.
The survey compared insurance companies’ pricing on policies underwritten during the fourth quarter of last year with those underwritten during the same quarter of 2012. Price changes reported by insurance carriers between the third and fourth quarters of 2013 point to increases, but they are smaller than the 6-7 per cent increases which were recorded during the second half of 2012 and the first half of 2013.
Except for general and products liability and excess or umbrella liability, price increases by lines of business were lower than those reported in the third quarter in all lines. Employment practices liability had the highest price increase year over year. Workers’ compensation and excess or umbrella liability also showed considerable increases.
Prices for most lines of commercial insurance increased in the mid-single digit range. None of the classes surveyed had a drop in price. Price increases were consistent across the board for small, mid-market and large accounts. Specialty pricing increased at a much lower rate than for standard product lines.
According to Tom Hettinger, Towers Watson’s Property & Casualty sales and practice leader for the Americas, commercial insurance prices are still rising and have been increasing for three years. Concerns about price inflation and modest fixed-price yields are moving into rate changes which are outpacing observed claim cost inflation.
Previous Post
Polish Commercial Investment Highest Since 2006
