Commercial Insurance Rate Hikes Continue, But Pace Slows in Q4 2024
According to WTW’s latest Commercial Lines Insurance Pricing Survey (CLIPS), US commercial insurance rates continued their upward trend in the fourth quarter of 2024. However, the pace of these increases has slowed compared to earlier in the year.
The survey, which measures year-over-year changes in policy premiums, indicated an aggregate price increase of 5.6% in Q4. This is a decrease from the 6.1% rise recorded in Q3. Despite the overall moderation, certain coverage lines experienced significant shifts.
Excess/umbrella liability saw its most substantial price increase in three years. Commercial auto insurance also saw its largest price jump since the CLIPS began tracking data. Meanwhile, commercial property saw a more moderate increase, with rates rising at a lower level than in previous quarters.
Pricing trends varied across different account sizes. Mid-market accounts continued to experience a slowdown in rate increases, extending the trend from the previous quarter. Small accounts also saw lower price increases compared to Q3. Rates for large accounts remained relatively stable.
Yi Jing, Senior Director of Insurance Consulting and Technology (ICT) at WTW, commented on the findings. “The data reflects ongoing price increases, albeit at a moderated pace compared to earlier in the year,” he explained. “While commercial auto and excess/umbrella liability continue to see significant rate hikes, the commercial property sector showed a slowdown in pricing adjustments.”
On a global scale, a separate index from Marsh revealed that commercial insurance rates fell by 2% in the fourth quarter of 2024. This marks the second consecutive quarterly decline, following seven years of rate increases. The Q3 2024 saw a 1% drop. The decreases reflect continued moderation in pricing trends across multiple lines of business.
Regional trends also showed variations. The Pacific region experienced the largest year-on-year composite rate decrease, at 8%, in Q4. The UK saw a 5% decline, while rates in Asia fell by 3%, and both Europe and Canada recorded a 2% decrease.
