NEW YORK, June 10, 2024 (GLOBE NEWSWIRE) — According to WTW, a leading global advisory, broking and solutions company, U.S. commercial insurance prices have maintained a steady trend with respect to consistent, routine, price increases. Based upon the company’s Commercial Lines Insurance Pricing Survey (CLIPS) for the first quarter of 2024, quarterly price increases of approximately 6% have remained steady since the global pandemic. The survey compares insurance prices on policies underwritten during the first quarter of 2024 to those prices for the same coverage in the same respective quarter of 2023 for a year-over-year perspective.
The commercial lines insurance price change reported by carriers participating in the CLIPS study demonstrated an overall increase of 6.3% for the first quarter of 2024, nearly identical to the rate for the fourth quarter of 2023 for the same group of participants.
Drilling down into specific commercial coverage areas contributing to the aggregate quarterly rate result, some coverages stand out. For example, Excess Umbrella Liability coverage has shown significant price increases over the last few years. Throughout that time, the fourth quarter of 2022 indicated the lowest rate increase (single digits) when compared to the other quarters within that time window. From early 2023 to the present, this coverage area has jumped back up to double-digit quarterly price increases.
When considering Commercial Property rate activity, from the first quarter of 2021 through the fourth quarter of 2022, quarterly rate increases had slowed to single digits. However, since that time, rates have begun experiencing increases and remained at double-digit increases for the last five quarters.
In evaluating the cyber insurance market from the CLIPS survey data, Cyber, after having significant price increases from mid-2020 to the third quarter of 2022, has seen price decreases in the last few quarters with the most recent one moving into a single-digit price decrease. Since mid-2022, when the Directors & Officers Liability (D&O) market began shifting from hard to soft, the price decreases reached double-digit levels, while recent data shows that the D&O market has now stabilized with low to mid-single digit decreases.
As economic inflation begins to show signs of slowing down throughout the U.S. economy, its impact is contributing to the variations in commercial insurance rates for corporations.
“Rates continued to harden across many coverage lines in the first quarter of 2024, but have slowed somewhat from the previous quarter, with the exception of excess/umbrella liability, where we saw an acceleration of rate increases since the first quarter of 2023,” said Yi Jing, Senior Director, Insurance Consulting and Technology (ICT), 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 for the upcoming quarter can be found in WTW’s Insurance Marketplace Realities series (published twice per year, every spring and fall).
About CLIPS
CLIPS data are based on both new and renewal business figures obtained directly from carriers underwriting the business. CLIPS participants represent a cross-section of U.S. P&C insurers that includes many of the top 10 commercial lines companies and the top 25 insurance groups in the U.S. This survey compared prices charged on policies written during the third quarter of 2023 with the prices charged for the same coverage during the same quarter of 2022. For this most recent survey, 43 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data.
About Insurance Consulting and Technology
WTW’s Insurance Consulting and Technology business serves the insurance industry with a powerful combination of advisory services and leading-edge technology. Our mission is to innovate and transform insurance, and we deliver solutions that help clients better select, finance, and manage risk and capital.
We work with clients of all sizes globally, including most of the world’s leading insurance groups. Over 1,000 client companies use our specialist insurance software on six continents. With over 1,700 colleagues in 35 markets, we continually strive to be a partner and employer of choice to the insurance industry.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you.
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