With the exception of directors & officers liability and workers compensation, nearly all lines of business in the U.S. continued to see rate increases in the third quarter of 2022, according to WTW’s Commercial Lines Insurance Pricing Survey (CLIPS).
The pace of price increases continues to moderate, according to CLIPS, which compares prices charged on policies underwritten during Q3 2022 to prices charged for the same coverage during Q3 2021 based on information from carriers.
“The aggregate commercial price change reported by carriers spiked upward to nearly and above 10 percent in the second through the fourth quarters of 2020, and since then has started declining to 5 percent now in the third quarter of 2022,” said broker WTW.
The aggregate commercial price change was 6 percent during Q2 2022.
WTW said the largest price increases are still in cyber insurance, with the second largest increases in excess umbrella liability. Commercial auto insurance experienced the increases near or about double-digits for the 12th straight quarter. “Package commercial multi-peril/business owner policy is exceptional with a higher price increase than previous quarter,” said Yi Jing, director of insurance consulting and technology at WTW, in a statement.
Earlier this month, WTW released its Insurance Marketplace Realities 2023 report. Here, the broker said the second half of 2022 was marked with overall improvement in pricing, coverage and capacity for many commercial lines of business; however, commercial property is facing headwinds. Hurricane Ian will affect personal lines to a greater degree, but WTW said “commercial response has been swift and dramatic,” with “insurers making immediate adjustments to catastrophe capacity and rate” while the forecast for reinsurance renewals is “grim.” Economic inflation is also affecting replacement cost values.
Meanwhile, social inflation continues to drive up court costs on the casualty side of commercial lines, WTW said.