For the sixth consecutive quarter commercial insurance prices in aggregate increased, according to the new Commercial Lines Insurance Pricing Survey (CLIPS), conducted by Towers Watson.

The survey compares prices charged on policies underwritten during the second quarter of 2012 to those charged for the same coverage during the same quarter in 2011. Second-quarter 2012 commercial insurance prices in aggregate increased by 6 percent, the largest increase in eight years.

The largest contributors were workers’ compensation and commercial property, with increases in the high single digits. Directors and officers, and employment practices liability data saw price increases in the mid-single digits, a departure from the relatively flat pricing of the last two quarters.

While price increases were observed for all account sizes, mid-market and large accounts saw larger increases than small commercial accounts. Specialty commercial lines pricing rebounded, though increases were not as large as those observed in standard commercial lines.

The report also indicates an improvement of more than 1 percent in loss ratios in accident-year-to-date 2012 relative to 2011, as earned price increases more than offset reported claim cost inflation. This is a reversal from the estimated 3-percent loss ratio deterioration between 2010 and 2011, Towers Watson said. Carrier estimates of claim cost inflation improved since the prior quarter, as estimated claim cost inflation through the first half of 2012 in aggregate is 2 percent, compared to almost 4 percent in 2011.

“Improving loss ratios do not necessarily mean better results, as faltering investment income offsets improvements in underwriting outcomes,” said Thomas Hettinger, property/casualty sales and practice leader for the Americas at Towers Watson. “Insurers’ success as 2012 draws to a close will continue to depend on pricing discipline and moderate loss trends.”

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