According to the latest insurance spending report from TowersWatson, commercial insurance prices rose just 3% in the secondquarter of 2014, following several quarters that saw increases over6%.

The result continues a price moderation trend that has been inplace for commercial lines since mid 2013, Towers Watson said.

“Carriers are reporting loss ratios for 2013 and 2014 thatbenefit from 2012 and 2013 price levels,” said Alejandra Nolibos,director in Towers Watson's property & casualty business. “Nowthey are seeing a continuation of low loss cost trends and no lackof capital in the market, which may be leading to the slowdown inprice increases. In particular — and consistent with theavailability of capital through abundant reinsurance capacity —property rates are dropping sharply.”

True, according to the report, commercial property insuranceprices declined for the first time in three years last quarter,marking the first time since 2011 that any of the firm's surveyedlines showed a quarterly decrease. Over half of all commercialproperty respondents reported price decreases in Q2, Towers Watsonsaid.

On the upside, employment practices liability saw the largestprice incrsed, followed by commercial auto. Workers' compensationprices were up in the quarter as well, but less so than this timelast year

“The survey noted that loss ratios improved 2% foraccident-year-to-date 2014 relative to the same period in 2013(excluding catastrophes), as earned price increases continued tooffset claim cost inflation,” the report read. “This developmentbuilds on the estimated loss ratio improvement of nearly 6% between2012 and 2013. In aggregate, carriers reported approximately flatclaim cost inflation for 2013 and more than 2% for year-to-date2014.”