Commercial Lines Pricing Remains Flat

The soft market persists as commercial insurance prices were relatively flat for the ninth consecutive quarter, new data from New York-based Towers Watson indicates.

According to the most recent “Commercial Lines Insurance Pricing Survey” (CLIPS), loss ratios deteriorated by 5% in accident-year 2010, as price reductions continued for commercial property and management liability lines. Bucking this downward trend was workers’ compensation lines, which showed a modest overall price increase in the first quarter of 2011.

“The increases in workers’ compensation prices this quarter are larger than we’ve seen in quite some time, and package and general liability are also showing upticks,” says Bruce Fell, director of Towers Watson’s Property & Casualty practice in the Americas. “While the overall story is still one of flat prices, the observed movements, coupled with recent weather-related insurance losses that are expected to firm property prices, could mean more significant increases in the second quarter of 2011.”

Survey data, which compare prices charged on policies underwritten during the first quarter of 2011 to the prices charged for the same coverage during the same quarter in 2010, were contributed by 39 participating insurance companies representing approximately 20% of the commercial insurance market.