Commercial Insurance Prices Rise Significantly In Q3

ARLINGTON, VA, December 7, 2020 – U.S. commercial insurance prices again grew significantly in the third quarter of 2020, according to leading global advisory, broking and solutions company Willis Towers Watson’s Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the third quarter of 2020 to those charged for the same coverage and quarter in 2019 and found the aggregate commercial price change reported by carriers was near 10% for the second consecutive quarter.

Price changes for nearly every line were consistent with the increases from the prior quarter survey. Excess/umbrella and directors’ and officers’ liability insurance reported the largest price increases; commercial auto showed increases of near or above double digits for the 12th consecutive quarter. The outlier continues to be workers compensation, which indicated modest price reductions, though they have tempered for the last seven quarters. Price changes differed by account sizes with small accounts more muted, mid-market accounts near double digits and large accounts well into double digits.

“While commercial insurance prices continued to rise this quarter at a significant rate, CLIPS data indicate the acceleration in prices observed in recent quarters stabilized somewhat,” said Yi Jing, director, Insurance Consulting and Technology, Willis Towers Watson. “The price change level holding steady occurs despite the tethering impact of past workers compensation price reductions waning.”

CLIPS is a retrospective look at historical changes in commercial property & casualty insurance (P&C) prices and claim cost inflation. A forward-looking analysis of commercial P&C trends, outlook and rate predictions can be found in Willis Towers Watson’s Insurance Marketplace Realities series.