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U.S. commercial insurance rates continue to increase in the fourth quarter, albeit at a slower pace of 4.8%

U.S. commercial insurance prices have continued to increase in the fourth quarter of 2022, according to WTW and solutions company within their Commercial Lines Insurance Pricing Survey (CLIPS)...

The quarterly survey compared insurance prices on policies underwritten duringthe fourth quarter of 2022 to those charged for the same coverage throughout the same quarter in 2021. The amassed commercial price change reported by carriers was an increase of 4.8%, down somewhat from the rate of 5.2% in the previous quarter (Q3’22).

The coverage area that experienced the greatest price reduction was Directors & Officers’ liability (D&O), with a slightly larger drop than the prior quarter. Data for nearly for all lines of coverage continued to show price increases throughout the fourth quarter, with a general rate of +4.8%, while the only area demonstrating a double-digit increase was Commercial Auto, slightly higher than prior quarter. Commercial Property had the second-highest rate increase and Workers’ Compensation continued to have price decrease.

“Rates continued to harden across nearly all lines of coverage in the fourth quarter however at a slower pace. While the average change still showed an increase [of 4.8%], overall market tempering demonstrates a trend of sustained market stabilization.” said Yi Jing, Director, Insurance Consulting and Technology, WTW.

CLIPS is a retrospective look at historical changes in commercial property & casualty insurance (P&C) prices and claims cost inflation. A forward-looking analysis of commercial P&C trends, outlook, and rate predictions can be found in WTW’s Insurance Marketplace Realities series.

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