The survey compared prices charged on policies underwritten during the fourth quarter of 2018 to those charged for the same coverage during the same quarter in 2017. The price change reported by carriers for the quarter was just under 2%.
Price changes for most lines were similar to those reported last quarter. Commercial property prices, which had been showing small price decreases for much of 2017, indicated price increases in excess of 4%. For the fifth consecutive quarter, commercial auto showed significant price increases at or near double digits. Ongoing material price reductions for workers compensation were reported, in contrast to all other surveyed lines. Price changes were positive and of reasonably similar magnitude across all account sizes. Early reports of 2018 claim cost inflation indicate higher cost increases than in 2017.
“Price increases for the fourth quarter were primarily modest, yet sustaining the level reported throughout 2018,” said Jeffrey Carlson, director, Insurance Consulting and Technology, Willis Towers Watson. “Also, the uptick in carriers’ reported claim cost inflation for 2018 may be contributing to upward pressure on rates.”
CLIPS is a retrospective look at historical changes in commercial property & casualty (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 Marketplace Realities series.
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