NU Online News Service, June 14, 2:29 p.m. EDT

A survey of insurance carriers finds the commercial-insurance market is remaining relatively flat for the ninth month in a row, says Towers Watson.

In its Commercial Lines Insurance Pricing Survey (CLIPS), Towers Watson says price levels have remained at minus-1 percent for the past three quarters after dropping from zero for the third quarter of 2009 to the first quarter of 2010. The numbers excluded state workers’ compensation funds.

The CLIPS survey of 39 insurance companies, representing 20 percent of the commercial-insurance market, indicates the flattening trend began in the 2008 fourth quarter, when pricing rose from negative-4 percent to negative-2 percent. Since then, prices rose to a positive 1 percent in the second quarter of 2009 before dropping back to zero and remaining around there since.

In a statement, Towers says price reductions continued for commercial-property and management-liability lines. However, workers’ compensation is showing modest increases after remaining flat for the last two years overall.

Taking California out of the mix, price levels show an increase for the fist time in six years, along with slight price increases for 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,” says Bruce Fell, director of Towers Watson’s property and 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.”

The consulting firm says 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 percent.

Aggregate price-change indications showed some differentiation by account size, with small price increases for small and midmarket accounts, flat prices in large accounts, and price reductions in specialty lines.

The survey echoes some other commercial-market surveys pointing to some moderation in the commercial-lines soft market.

Recently, MarketScout, the online insurance exchange, says its survey indicates prices remain soft at minus-4 percent where they have been for the last two months.

In its most recent survey of insurance brokers, The Council of Insurance Agents & Brokers says commercial-lines renewals during the first quarter of 2011 stood at 2.9 percent.

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