US commercial lines prices increased 6% YoY in Q2 2022: WTW’s Clips
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US commercial lines prices increased 6% YoY in Q2 2022: WTW’s Clips

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US commercial insurance prices rose by around 6% year on year during the second quarter, with nearly all business lines showing increases except for workers’ comp and D&O, according to WTW’s latest Commercial Lines Insurance Pricing Survey (Clips).

Cyber continued to register the largest increase in the period, while D&O saw a small price drop compared to a moderate increase in the previous quarter.

The survey compared prices charged on policies underwritten during the second quarter of 2022 to those charged for the same coverage during the same quarter in 2021.

The aggregate commercial price change reported by carriers spiked upward to nearly and above 10% in the second through the fourth quarters of 2020, and since then has declined to just below 6% in the second quarter of 2022.

Change in price level vs same quarter one year prior wtw clips q2 22.jpg

WTW director of insurance consulting and tech Yi Jing said: “The price increases for most lines continued to be strong in the second quarter of 2022. Commercial property saw a larger price increase than the prior quarter, in contrast to all other surveyed lines of business.

“This seems to be consistent with the impact of recent changes in general inflation, particularly with the cost of materials and labor related to property damage repairs.”

Recent market commentary has signposted a pricing environment that remains firm, with rates continuing to rise significantly in the excess and surplus lines market.

Overall, Q2 commercial lines rates held up better than expected, with instances where disclosure pointed to a re-acceleration of rate rises, according to management commentary on recent earnings calls.

The Q2 disclosures of several firms, including Chubb, American Financial Group and Markel, have supported projections of a gentle drift down in rates, albeit with slower rate rises that remained above loss-cost trends.

However, the industry’s second-quarter results so far demonstrate that the rate trajectory has not been uniform across the board in commercial lines.

Some companies have reported a re-acceleration in certain segments or lines of business – a development that accentuates the complexity of the dynamics surrounding the market today.

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