CLIPS survey points to hard market

I’ll just crib the press release:

In an indication that the market may be hardening, commercial insurance prices in aggregate increased by nearly 1.5% during the second quarter of 2011 — the first time since the fourth quarter of 2003 that all standard commercial lines showed an uptick in pricing — according to global professional services company Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS).

It appears to be the largest increase since Q3 2004. There were increases in all standard lines. Workers comp has been rising for three consecutive quarters. Commercial property rates rose for the first time in a year. D&O prices fell sharply.

There were increases in all account sizes, but middle-market and large accounts rose the most.

Towers survey continues to show the importance of predictive modeling:

Results indicate that companies that use predictive modeling for pricing/risk tiering and risk selection are achieving greater price increases than those that do not, consistent with surveyed results from second quarter 2010. More than 50% of reported premium volume corresponds to companies reporting use of predictive modeling for pricing/risk tiering, and more than 30% corresponds to carriers reporting use of predictive modeling for risk selection.

More here.

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2 thoughts on “CLIPS survey points to hard market

  1. DW says:

    Looks like you’d have said the same thing in 2009.

    I wonder what the slope was like in 1999 through 2003, before the ‘real’ hard market.

    • jimlynch9999 says:

      The difference this time, according to Towers, is that all standard lines showed an increase. I tried to make that clear in the post, but perhaps could have done a better job.
      Towers’ survey was started in 2005, collecting information back to 2003. I’m researching an article on rate monitors for Contingencies magazine and finding that most publicly available monitors started up in the 99-03 period in response to market conditions then.

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