U.S. commercial property/casualty insurance prices rose during the second quarter of 2020 by almost 10% compared with prices charged during the same quarter of 2019.
Excess/umbrella and directors’ and officers’ liability data indicated the largest price increases, with prices for both growing by over 20% for the second consecutive quarter
These findings are based on insurance broker Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the second quarter of 2020 to those charged for the same coverage during the same quarter in 2019.
Carriers reported that the aggregate commercial price change grew by almost 5% in the third quarter of 2019, over 6% for the 4th quarter of 2019 and first quarter of 2020, and then jumped to just under 10% in the second quarter.
Commercial auto data indicated price increases near or above double digits for the 11th consecutive quarter. Property prices accelerated significantly in the past four quarters, now indicating increases well into the double digits.
Only workers’ compensation showed price reductions, and they continue to slowly decrease in magnitude.
Overall, price changes differed significantly by account sizes. Small commercial accounts grew by mid-single digits; mid-market accounts showed double-digit increases, and large accounts were well above this range.
“Second quarter data indicated the biggest quarter-to-quarter shift in CLIPS history, dating back to 2003, and underscoring the uncertainty of the day,” said Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson. “The combination of social inflation, civil unrest, the economy and uncertainty around COVID-19 has created an increasingly cautious industry.”
CLIPS is a retrospective look at historical changes in commercial property and casualty insurance prices and claim cost inflation.
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