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Member, Beacon International Group, Ltd.
Commercial insurance prices declined slightly in the second quarter of this year compared with the same period last year, which Towers Watson & Co. said Tuesday is the sixth straight quarter of relatively flat prices.
In aggregate, commercial insurance prices declined 1% during the period. Most lines were flat while commercial property, directors and officers liability, and employment practices liability lines showed slight reductions, according to the “Commercial Lines Pricing Survey.”
Towers Watson said the survey also found that insurers that use predictive modeling to price and tier their risks reported a slight increase in average prices compared with insurers that don't use predictive modeling.
“The commercial lines insurers that are taking advantage of predictive modeling are finding new rating variables and sources of data, and are applying the results in new and innovative ways,” Bruce Fell, practice leader of Towers Watson's risk consulting and reinsurance brokerage services to the property/casualty industry in the Americas, said in a statement.
The survey was based on new and renewal business figures obtained from U.S. property/casualty insurers. The survey included several top-10 commercial insurance lines companies, as well as some of the top 25 insurance groups, comparing prices charged on policies underwritten during the second quarter of 2010 to the prices charged for the same coverage during the same quarter in 2009.
Survey results also indicated that preliminary accident loss ratios for the first six months of this year deteriorated 4% relative to the same period last year, which Towers said is consistent with an estimated deterioration of 4% for accident year 2009 over 2008.
A summary of the survey is available at www.towerswatson.com/press/2787.