Posted on 14 Jun 2010
Commercial insurance prices in aggregate remained flat during the first quarter of 2010, according to Towers Watson's most recent Commercial Lines Insurance Pricing Survey (CLIPS).
The survey compared prices charged on policies underwritten during the first quarter of 2010 to the prices charged for the same coverage during the same quarter in 2009. Survey data were contributed by thirty-seven participating insurance companies, which represents approximately 20% of the commercial insurance market (excluding state workers compensation funds).
This latest data point is consistent with the flat pricing observed during all of 2009, following almost 5 years of price decreases. Data for most lines indicate flat or small increases in prices, offset by price reductions in Commercial Property, Directors and Officers Liability, and Employment Practices Liability.
CLIPS indicates that accident year to date 2010 loss ratios deteriorated 5% relative to year to date 2009. This deterioration – which is based on only three months of information and is therefore very preliminary - compares to an estimated deterioration of 4% for accident year 2009 over 2008. Early estimates of claim costs through the first quarter point to somewhat higher inflation than that observed in 2009, which contributes to the larger loss ratio deterioration.
Aggregate price change indications showed little differentiation by account size, as all were nearly flat.