US commercial insurance prices see biggest hike in Q4 2020

US commercial insurance prices grew significantly in the fourth quarter of 2020 with the largest increases coming from excess/umbrella liability and directors’ and officers’ liability, according to Willis Towers Watson’s latest Commercial Lines Insurance Pricing Survey (CLIPS).

Data for nearly all lines indicated significant price increases. The survey found that aggregate price change reported by carriers was above 10 percent, the highest increase in the history of CLIPS.

WTW noted that price changes for most lines were consistent with the increases in the third quarter survey, but differed by account sizes with small accounts muted, mid-market accounts into double digits and large accounts well into double.

Claim cost trends indicated that loss ratios (excluding catastrophes) for accident year 2020 project was lower than 2019 across all surveyed lines except workers compensation.

Yi Jing, director, Insurance Consulting and Technology, Willis Towers Watson, said: “Commercial insurance prices continued their rise during the fourth quarter and even exceeded double-digit increases, marking the highest rate in the four quarters of 2020.

“These significant price change levels occurred despite rate decreases for workers compensation, for which prices are now flattening after the last 22 quarters of rate decreases.”

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