Q4 2023 sees increase in US commercial insurance rates

Commercial insurance rates in the US have been steadily increasing throughout the fourth quarter of 2023, according to a recent report released by WTW. The Commercial Lines Insurance Pricing Survey (CLIPS) conducted by WTW revealed a consistent upward trend in premiums, with a collective rise of 6.6% in the fourth quarter compared to the same period in 2022.

This latest data indicates another quarter where the growth rate has surpassed 6%, highlighting the ongoing escalation of commercial insurance rates. Yi Jing, the director of Insurance Consulting and Technology (ICT) at WTW, emphasized the significant shifts in commercial insurance rates seen across various sectors. Jing stated that these findings underscore the dynamic nature of the market and the importance of strategic adaptation to meet market demands effectively.

Notable increases were seen in multiple coverage areas, with some experiencing double-digit growth while others reported slight declines. This emphasizes the need for businesses to remain flexible and adapt to the changing market conditions. The most substantial price hike was observed in commercial auto insurance, showing a double-digit increase that exceeded the previous quarter's rate by almost 4%.

Additionally, package commercial multi-peril/business-owner's policy (CMP/BOP) and general liability saw increases that surpassed previous quarterly rates. Commercial property and excess umbrella coverages also continued to show robust double-digit growth. Conversely, workers compensation, directors and officers (D&O) liability, and cyber insurance saw minor declines in rates.

Overall, these trends indicate the evolving landscape of commercial insurance rates in the US and the importance for businesses to stay informed and agile in response to market changes.