Commercial Insurance Prices Rise 6.3% in Q1 2024

The latest commercial lines pricing survey from WTW reveals continued upward pressure on U.S. commercial insurance prices in Q1 2024.
By: | June 10, 2024
Topics: News
rate increases

U.S. commercial insurance prices continued their upward climb in the first quarter of 2024, rising 6.3% in the aggregate over the fourth-quarter of 2023, according to a survey of U.S. property & casualty insurers by WTW.

WTW’s Commercial Lines Insurance Pricing Survey (CLIPS) aims to shed light on the key trends, challenges, and opportunities shaping today’s commercial insurance landscape, but only survey participants received detailed results.

“Rates continued to harden across many coverage lines in the first quarter of 2024, but have slowed somewhat from the previous quarter, with the exception of excess/umbrella liability, where we saw an acceleration of rate increases since the first quarter of 2023 ” said Yi Jing, senior director, Insurance Consulting and Technology (ICT), WTW.

Commercial Insurance Price Trends

The commercial P&C insurance market has experienced significant price fluctuations in recent years, according to WTW.

For example, the aggregate commercial pricing change reported by carriers spiked to nearly 10% in Q2 through Q4 of 2020, indicating a challenging market for buyers, WTW noted.

Price increases declined to just below 5% by the fourth quarter of 2022. But this trend was short-lived, as prices rebounded to above 5% in the first quarter of 2023 and continued to climb last year, exceeding 6% in both the fourth quarter of 2023 and the first quarter of 2024.

The recent increases suggest that upward pricing pressure will remain a concern for businesses seeking commercial insurance coverage, according to WTW.

Price Trends by Line of Business

Most lines of commercial insurance saw moderate to significant price increases in the first quarter of 2024, with a few exceptions. Workers’ compensation experienced slight price reductions, while directors’ and officers’ liability prices decreased for another quarter, albeit at a slower rate than the previous quarter, WTW found.

Excess/umbrella liability had the largest price increase, reporting double-digit increases for the 20th-consecutive quarter, per the survey. Commercial property also continued to see double-digit price increases, though slightly lower than the previous quarter. Similarly, commercial auto liability reported double-digit increases but lower than the prior quarter.

Cyber insurance rates, which had seen significant increases in 2021 through the third quarter of 2022, started to decrease significantly from the first quarter of 2023 through the first quarter of 2024, according to WTW. However, the rate of decrease for cyber slowed in the latest quarter compared to the previous one.

Specialty lines experienced essentially flat rate changes. This was due to a balance between rate increases in professional liability and employment practice liability, offset by decreases in directors’ and officers’ liability, WTW stated. The mixed results in specialty lines indicate that pricing trends vary depending on the specific coverage area, with some lines experiencing upward pressure while others are seeing a decline in rates, the broker noted.

For more information about the Q1 CLIPS report, visit WTW website.

The R&I Editorial Team can be reached at [email protected].

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