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Commercial Lines Insurance Pricing Survey

Commercial insurance prices remained nearly flat during the third quarter of 2009, according to Towers Perrin's most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten by thirty-five participating insurance companies during the third quarter of 2009 to the prices charged for the same coverage during the same quarter in 2008.

The flat indication is held up by firming property and specialty prices. This latest data point is consistent with a stabilization of the soft market, as were price change indications from the second quarter, and follow almost 5 years of price decreases . Two lines indicate price reductions in aggregate; workers' compensation and commercial auto, both being small in magnitude.

Year to date through the third quarter, CLIPS indicates that accident year 2009 loss ratios deteriorated 5% relative to 2008. Improvement in claim cost inflation and stabilizing prices contribute to the relatively modest 2009 loss ratio deterioration. This deterioration comes on top of an estimated deterioration for accident year 2008 of 9% over 2007.

Prices for large accounts rose slightly in the third quarter of 2009, while middle-market accounts were flat. The large accounts upturn is not entirely surprising as, according to CLIPS data, large accounts suffered the greatest price declines in both 2007 and 2008. Small account prices continue to show modest — but ever smaller — price decreases.

Prices for property, package CMP/BOP, and general/products liability increased slightly according to CLIPS data, as well as many specialty lines such as D&O, professional liability, and employment practice liability.

Change in Price Level vs. Same Quarter One Year Prior

Contribute Your Company Data

We hope you will consider joining the effort by contributing your company data. Your participation will help fulfill an important industry need while providing you with valuable information. There is no charge for participating in the survey.

As a participant, you will receive detailed results by line of business, market segment and region that will help you make more informed decisions in your reserve-setting process and better respond to demands for greater financial transparency.

View a prototype of the detailed report for survey participants.

For additional information about CLIPS or to sign up for the next edition, please contact survey leader Alejandra Nolibos.