ProgramBusiness
 
  


  1. News Articles
  2. Related News Articles
  3. Comments
News Article Details

Towers Watson: Commercial Lines Insurance Pricing Remained Flat for 4th Qtr '09

Source: Towers Watson


Posted on 18 Mar 2010

Facebook LinkedIn Twitter Google

Commercial insurance prices remained flat during the fourth quarter of 2009, according to Towers Watson's most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten by thirty-six participating insurance companies during the fourth quarter of 2009 to the prices charged for the same coverage during the same quarter in 2008.

This latest data points to a stabilization of the soft market where companies are showing pricing discipline — consistent with the observations during the first three quarters of 2009 — and follows almost 5 years of price decreases. Data for most lines indicate small increases in prices, offset by price reductions in Workers Compensation and Employment Practices Liability. For Workers Compensation, the latest quarterly data indicate a reduction in year over year loss costs that may be holding down pressure to increase prices.

CLIPS indicates that accident year 2009 loss ratios deteriorated 3% relative to 2008. However, this deterioration comes on top of an estimated deterioration for accident year 2008 of 9% over 2007. Flat aggregate loss cost changes indicate an improvement in claim cost inflation which combined with stabilizing prices contributes to the relatively modest 2009 change.

While the data is immature, the Workers Compensation loss cost trend indications seem to highlight the downward pressure on claim frequency. This pressure may be linked to current weak economic conditions, as fear of job loss or reductions in income deter claim reporting and encourage return to work, and the work force is on average more experienced given lower tier job reductions.

Aggregate price change indications showed little differentiation by account size, as all were nearly flat.


Comments

Post a Comment
If you are a Storefront / Tradingfloor user, click here to login.
Note: As a guest user, please fill out the form below to post a comment.
Post your comments here.
Name :
Email Address :
Captcha :
Comments :
Character left : 2000