NEW YORK–(BUSINESS WIRE)–Commercial insurance prices were relatively flat for the ninth consecutive quarter, and new data confirm the deterioration of loss ratios in accident-year 2010, according to global professional services company Towers Watson’s (NYSE, NASDAQ: TW) most recent Commercial Lines Insurance Pricing Survey (CLIPS).
Price reductions continued for commercial property and management liability lines. However, after large decreases followed by the relatively flat indications of the last two years, workers compensation data show a modest overall price increase in the first quarter of 2011. (California price increases had been offset by overall decreases elsewhere in recent quarters, but in the first three months of 2011, pricing levels outside California show an increase for the first time in nearly six years). Additionally, CLIPS data show slight price increases for some standard commercial lines.
“The increases in workers compensation prices this quarter are larger than we’ve seen in quite some time, and package and general liability are also showing upticks,” said Bruce Fell, director of Towers Watson’s Property & Casualty practice in the Americas. “While the overall story is still one of flat prices, the observed movements, coupled with recent weather-related insurance losses that are expected to firm property prices, could mean more significant increases in the second quarter of 2011.”
Survey data, which compare prices charged on policies underwritten during the first quarter of 2011 to the prices charged for the same coverage during the same quarter in 2010, were contributed by 39 participating insurance companies representing approximately 20% of the commercial insurance market.
Preliminary information through the first quarter indicates single-digit deterioration in 2011 first quarter loss ratios relative to the same period in 2010. The estimated deterioration for accident-year 2010 over 2009 is 5%.
Aggregate price change indications showed some differentiation by account size, with small price increases for small and mid-market accounts, flat prices in large accounts and price reductions in specialty lines.
See the CLIPS post on the Towers Watson Blog here.