Towers Watson: Commercial rates up 7%

Here’s the survey.

And here’s a pretty picture:

towers q4-12All lines of business are up at least 3%, Towers said. Workers comp and EPLI had the largest increases.

I increasingly believe this is what hard markets look like now – less steep and longer lasting – thanks to more rigorous price monitoring and the management discipline imposed by Sarbanes-Oxley and Enterprise Risk Management.

Mid-market and large accounts had bigger increases than small accounts, a standard hard-market characteristic. AY2012 loss ratios are projected to be 4 percentage points less than AY2011, according to Towers, as earned price increases more than offset claims inflation. There I appear to differ from what Towers reports, as the consulting firm indicates “pricing data reported by carriers for the fourth quarter of 2012 indicated a pause in the upward industry price acceleration observed since the start of 2011.”

And whether the higher rates are also enough to offset the investment income lost to low bond yields is another question.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: