The rate of increase for commercial insurance prices fell slightly to 5% in the third quarter of 2013, according to Towers Watson & Co.'s most recent Commercial Lines Insurance Pricing Survey.
While this marked the 11th consecutive quarter of price increases, the 5% increase is less than the 6% increase recorded for the second quarter of 2013. According to the CLIPS survey data, the lines of business recording the biggest price increases included employment practices liability, workers compensation and commercial auto. Moreover, mid-market accounts had higher price increases than large and small commercial accounts, while specialty lines prices increased at a lower rate than standard lines, Towers Watson said.
“The survey results are really in line with our expectations,” Tom Hettinger, Towers Watson's property/casualty sales and practice leader for the Americas, said in a statement. “This hard market is somewhat different from hard markets we have experienced before. Carriers are taking rate, which is logical, as they focus on measuring the capital required to support the business rigorously and realistically, and adjust their return expectations accordingly.”
CLIPS data is derived from information about both new and renewing business Towers Watson obtains directly from the insurers underwriting the business. According to Towers Watson, participating insurers represent a cross section of U.S. property/casualty insurers, with 40 insurers representing approximately 20% of the U.S. commercial insurance market participating in the most recent survey.