Price gains are slowing down after commercial insurance prices increased for the 11th straight quarter, rising by 5 percent in aggregate during third-quarter 2013, according to Towers Watson.
The professional services company’s third-quarter update to its Commercial Lines Insurance Pricing Survey shows that the magnitude of the 5 percent price-level increase is below the 6 to 7 percent gains of the past six quarters.
According to Towers Watson, price hikes by line of business were lower than those reported in the second quarter in all lines with the exeception of employment practices liability, where price increases spiked into double digits. The next biggest gains were in the workers’ compensation and commercial auto lines, with price increases for most lines falling in the mid-single digits, according to the report.
No line of business reported a price decrease.
Other findings showed mid-market accounts had higher price increases than large and small commercial accounts, and specialty lines prices increased at a lower rate than standard lines.
The survey compares carriers’ pricing on policies underwritten during the third quarter of 2013 to those underwritten in the same quarter of 2012.
Towers Watson said that survey respondents are reporting improved loss ratios, with accident-year 2013 ex-catastrophe loss ratios anywhere from 3 to 6 points better than accident-year 2012, and that earned price increases are more than offsetting low reported claim cost inflation.
Carriers surveyed estimate no claims cost inflation for 2013 on average, although the median response was just under 3 percent, the survey shows.
Topics Trends Commercial Lines Business Insurance Pricing Trends
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