According to the results of the most recent Towers Watson Commercial Lines Insurance Pricing Survey (CLIPS), the prices for commercial insurance increased by a total of 3 percent throughout the final quarter last year, which completed a year in which every quarter saw rising prices for all lines of standard commercial products.
Furthermore, according to the report by the global professional services company, earned price increases are starting to compensate for the portions of the reported claim cost inflation levels.
Data from CLIPS showed that, yet again, the commercial property and workers’ compensation prices have demonstrated the largest quarterly hikes – within the mid- to high-range of the single digits – and that general/products liability followed close behind.
Though there had been a flat pricing through every quarter of 2010, 2011 showed an increasing trend throughout every quarter for workers’ compensation pricing. Commercial property increased for three consecutive quarters at the end of 2011.
According to the Towers Watson Property & Casualty sales and practice leader for the Americas, Thomas Hettinger, “While modest, aggregate increases in prices continued, and more importantly, these increases accelerated in each quarter of 2011.” He also stated that they have now reached the point that they may “call the pricing turn” within the market.
The data collected from CLIPS also indicated that, overall, the specialty lines remained relatively flat, and that there were indications of stabilizing among the directors and officers (D&O) liability pricing after a significant period of instability. The D&O liability line had been considered the final remaining holdout in terms of soft market conditions, with notable price reductions having been seen throughout the previous seven quarters.