Commercial-insurance rates were up by 7 percent in 2013’s first quarter compared to the same period a year ago, essentially continuing the pace of increases seen over the past two quarters, Towers Watson says in a recent survey.
In its most recent Commercial Lines Insurance Pricing Survey (CLIPS), Towers Watson notes that the largest rate increases were in workers’ compensation and employment practices liability lines, adding that no line of business showed increases of less than 4 percent in the quarter. Towers Watson also says increases were observed across all account sizes for standard-commercial lines, with larger increases in mid-market accounts than in large accounts and small accounts.
In its previous CLIPS survey covering 2012’s fourth quarter, Towers Watson observed a pause in the rate-increase acceleration seen since the start of 2011. That trend continued in 2013’s first quarter.
Towers Watson says, “Price increases in total and by line of business were generally consistent with price increases in the fourth quarter of 2012, but with mild increases in magnitude for professional liability, and mild decreases in magnitude for workers compensation and employment practices liability.”
Commercial-lines rates overall were up by 7 percent in 2012’s fourth quarter compared to the same period the year before, the same increase seen in the latest first-quarter survey.
Towers Watson says that, while survey results are “very preliminary, historical loss cost information reported by participating carriers points to an improvement of almost 4 percent in loss ratios in accident [year-to-date] 2013 relative to the same period in 2012, as earned price increases more than offset reported claim cost inflation.”
The firm notes that CLIPS results exclude catastrophes.