The much-discussed moderating trend in commercial-lines rate increases was seen in Towers Watson's most recent Commercial Lines Insurance Pricing Survey, which showed rates up by 5% in 2013's fourth quarter compared to the same period in 2012.
By contrast, rates were up by 7% in 2012's fourth quarter compared to 2011's fourth quarter, and in the first three quarters of 2013, year-over-year rate increases were either 7% or 6%.
Towers Watson says price increases by line of business “were lower than those reported in the third quarter in all lines, with the exception of general/products liability and excess/umbrella liability.”
The firm says most lines saw rate increases in the mid-single digits, with the largest increases in employment-practices liability, followed by workers' compensation and excess/umbrella. No line of business reported a rate decrease.
The CLIPS survey says loss ratios improved by 3% compared to the same period in 2012 “as earned price increases more than offset reported claim-cost inflation.”
Rates for specialty lines increased at a lower rate than standard lines, Towers Watson says.
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