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U.S. commercial insurance prices were flat during the first quarter of this year, the fifth consecutive quarter of flat or slightly rising prices following five years of steady declines, Towers Watson & Co. said in a study released Monday.
In its “Commercial Lines Insurance Pricing Survey,” the New York-based consulting firm said excess capacity in nearly every line of commercial insurance combined with below-average catastrophic losses to keep prices flat during the first quarter of 2010 compared with the same period in 2009.
The survey compared prices charged on policies underwritten by 37 participating insurance companies that account for about 20% of the commercial insurance market excluding workers compensation, Towers Watson said.
The survey found that accident year-to-date loss ratios deteriorated 5% during the first quarter of this year compared with the first quarter of 2009. Further, commercial lines that had flat to small price increases during the first quarter were offset by price reductions in commercial property, directors and officers liability, and employment practices liability, the survey found.
“It’s apparent that the market conditions are holding down price increases, while insurers continue to exhibit pricing discipline given their concerns regarding the direction the economy may take,” Bruce Fell, practice leader for risk consulting and brokerage services to the property/casualty industry in the Americas for Towers Watson, said in a statement. “Looking at D&O, the price increases we had seen in the past year in response to the financial crisis have disappeared, and pricing seems to be reverting back to pre-crisis levels.”
A summary of the survey is at www.towerswatson.com.