The most recent Commercial Lines Insurance Pricing Survey (CLIPS) by Towers Watson, has shown that commercial insurance prices rose by an average of almost 1.5 percent during 2011’s second quarter, which is the first time that all standard commercial lines headed in an upward direction since 2003.
The results of CLIPS align with the preliminary results that were obtained by a Towers Watson survey which will soon be released. They showed that 75 percent of CFOs feel that the standard property market prices have either hit the lowest point that they will or that they are making a turn to climb again.
Moreover, though 87 percent of the participating CFOs did state that the casualty market has reached the bottom of its cycle or that it remains soft. Another 80 percent of the CFOs said that they expect it to harden within the next two years.
The CLIPS outcomes also suggested that the reason that the prices are increasing is because of workers compensation, which maintained the price enlargement trend which started in 2011’s first quarter. It also linked the increase to commercial property, which saw a rise for the first time in over a year. Though standard commercial lines accounts of all sizes did experience an increase in price, it was the large and mid-market accounts that were the biggest.
Managing director Bruce Fell of Towers Watson said that “It is too early to definitively call this a hardening market, but CLIPS results and the outlook of CFOs are pointing in that direction.”