Commercial insurance prices up 7% in 2013: Towers Watson
Reprints
Commercial insurance prices rose almost 7% during the first quarter of 2013 compared with the same period the previous year, according to a Towers Watson & Co. survey released in Monday.
The numbers mark the ninth straight quarter of rate increases recorded by Towers Watson's Commercial Lines Insurance Pricing Survey.
While workers compensation and employment practices liability showed the largest price increases, no line of business had an overall price increase of less than 4%, the report notes.
“Interestingly, pricing for property grew only modestly, with less movement than might have been expected considering losses related to Hurricane Sandy,” Tom Hettinger, Towers Watson's property/casualty sales and practice leader for the Americas, said in a statement. “That is not surprising, as there is plenty of reinsurance capacity out there.”
Bob Betz, Florida practice leader of Towers Watson's brokerage business, said the additional capacity was having a bigger impact on pricing for personal line business, where prices have fallen in 15% to 20% in some cases.
“Capacity has definitely increased for property reinsurance, as mainstream investors are joining specialists in the search for yields, specifically through alternative investments such as catastrophe bonds and collateralized reinsurance,” Mr. Betz said in the statement. “June renewals of Florida personal lines business are an example of additional capacity significantly lowering prices on a risk-adjusted basis.”
