Data for nearly all commercial lines continued to indicate price increases in the third quarter, except for directors & officers and workers compensation.
Commercial insurance prices have increased again during the third quarter of 2022, according to WTW's Commercial Lines Insurance Pricing Survey (CLIPS).
The survey compared prices charged on policies underwritten during the third quarter of 2022 to those charged for the same coverage during the same quarter in 2021. The aggregated commercial price change reported by carriers was an increase of 5%, down slightly from 6% during the previous quarter.
“The moderation of rate increases is clearly evident in the third quarter," said Yi Jing, director, insurance consulting and technology, WTW. “Package commercial multi-peril/business owner policy is exceptional with a higher price increase than previous quarter."
Data for nearly all lines continued to indicate price increases in the third quarter, except for directors & officers and workers compensation, with D&O showing a larger price decrease than was reported in the previous quarter. D&O buyers are seeing more competitive conditions, fueled by a reduced number of U.S. securities class actions, a slowdown in merger & acquisition activity and an influx of new market entrants.
Meanwhile, workers comp has been an outlier in insurance, bucking trends amid the COVID-19 pandemic. Lockdown restrictions caused fewer losses, creating a favorable market. However, wage inflation, as well as the long-term implications of COVID-19, threaten the market in the future.
In the third quarter, cyber continued to have the highest rate increase. However, the increase was much lower than was observed in the previous quarter. The last two years have resulted in double- and triple-digit premium increases in the cyber market following an influx of claims related to increased cybercriminal activity, according to Risk Placement Services (RPS) “2023 U.S. Cyber Market Outlook." Further, capacity continues to be a challenge, which is a problem driven by increased demand, more judicious limits deployment and some players exiting the market.
Although premium increases of between 15% and 25% may still be common at renewal, advancements within the market may provide respite for rate hikes as the market begins to adjust, the RPS report said.
When comparing account sizes, reported price changes were all in single digits, with specialty lines demonstrating the smallest price increase.
Will Jones is IA editor-in-chief.