In a classic “good news, bad news” report, Willis Towers Watsonfinds that commercial insurance prices continued to moderate forthe fourth quarter of 2015, but haven’t reached negative numbers,which is good news for businesses.

But here's the bad news for insurers during the same timeperiod: Aggregate prices increased by less than 1%, according tothe London-based risk management, insurance brokerage and financialadvisory company's latest Commercial Lines Pricing Survey.

The survey compared prices charged on policies underwrittenduring the fourth quarter of 2015 to those charged for the samecoverage during the same quarter of 2014. Willis TowersWatson found that the price changes reported by carrierscontinue a trend of moderation in increases that began in the firstquarter of 2013.

Consistent with the results for the third quarter of 2015,Workers' Compensation, Commercial Property, and Directors andOfficers Liability reported modest price decreases. Commercial Autoshowed the largest price increases, the survey found, with changesfor most other lines falling in the low single digits. Priceincreases were nearly flat for large accounts and mid-marketaccounts, while small commercial account data indicated modest butcontinued increases. For specialty accounts, the survey found thatprices turned slightly negative for the first time since 4Q2011.

The survey "suggests a market still in positive territory as topricing, but the story is very different by line. For example, wesee another quarter of price increases for commercial autoliability — fueled by deterioration in claim costs — while directorand officer price decreases, which started a year ago, continue toaccelerate as the market competes for the best-performingsegments,” said Alejandra Nolibos, director in Willis TowersWatson’s Americas Property & Casualty Insurance practice. “Thismeans a conclusion on pricing for the overall market is hard tointerpret, but carriers continue to report modest claim costinflation for most lines surveyed, which is keeping loss ratiomovements in check.”

Source: Willis Towers Watson

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