Industry Updates
On the Rise

• David Pilla
• July 2020
• 

U.S. commercial insurers saw aggregate price changes of more than 6% in the first quarter of 2020, continuing an upward trend in pricing, according to Willis Towers Watson.

The aggregate price change reported by carriers exceeded 6% for the second consecutive quarter, said the broker in a statement, citing its commercial lines insurance pricing survey.

The survey found the aggregate price change was an increase of just less than 6.5%, and the price change for the same quarter a year ago rose less than 2.5%.

“During the first quarter of 2020, we saw a continuation of substantial price increases for excess/umbrella and directors and officers liability,” Alejandra Nolibos, senior director, insurance consulting and technology at Willis Towers Watson, said in a statement.

“Focusing on workers' compensation, carriers reported reductions once again,” said Nolibos. “That said, first-quarter statistics are unlikely to reflect reactions to the short and midterm impacts of COVID-19, among them changes in task and employment mix and the economic situation.”

The broker said data for nearly all lines “indicated a rise in prices, some significant,” with double-digit increases for D&O liability, excess/umbrella, commercial auto and property.

“For most other lines, price changes were consistent with those observed in the prior quarter,” said Willis Towers Watson. “When comparing account sizes, price changes varied: muted for small commercial accounts and higher across midmarket accounts, with large accounts nearing double digits.”

Commercial insurance pricing worldwide rose 14% in the first quarter on increases in property insurance and in financial and professional lines, said broker Marsh in its own survey. “Although the COVID-19 global pandemic had an insignificant impact on pricing in the first quarter, the reported increase was the largest year-over-year increase in the Marsh Global Insurance Market Index since its inception in 2012,” Marsh said in a statement. “We anticipate that COVID-19 will likely have an impact on pricing for the balance of 2020.”

Global commercial insurance pricing rose for the 10th consecutive quarter in the first quarter, said Marsh.

“The insurance market in the first quarter experienced pricing increases in many geographies and across multiple products,” said Marsh in the survey. Property insurance pricing rose 15% in the quarter and casualty pricing increased 5%.

The pricing improvement extended gains seen in the fourth quarter, when Marsh found global commercial insurance prices rose nearly 11%.