Commercial-Lines Survey Points to Hardening Rates
NU Online News Service, Sept. 13, 1:51 p.m. EDT
Commercial-insurance prices increased by almost 1.5 percent in the 2011 second quarter after the first quarter remained flat, indicating that the market may be hardening, according to Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS).
Towers Watson says its survey results, which uses data by 38 insurers representing about 20 percent of the U.S. commercial-insurance market, is consistent with a CFO survey it will be releasing soon, in which 75 percent of respondents say standard property-market prices were at the bottom or turning upward.
Workers’ compensation and commercial property show the most significant price increases in the quarter, Towers Watson says. For workers’ comp, it is the second consecutive quarter in which rates have increased, while commercial-property prices increased for the first time in five quarters. Towers Watson notes commercial-property rates are likely influenced by catastrophes early in the season, and adds that “third-quarter indications will provide a more-complete indication of the pricing response.”
A notable exception to the price-increase trend was directors and officers liability, Towers Watson says, which continued to show “significant declines in price levels.”
The firm says historical loss-cost information reported by participating carriers points to a 3 percent deterioration in loss ratios in the 2011 first half, relative to the same period in 2010.