Commercial insurance prices fall yet again this quarter

One professional services company has indicated that prices for commercial insurance have fallen yet again for this quarter.  This marks seven quarters in a row that have seen prices decline.

Global professional services company Towers Watson & Co. indicated that prices receded by a less than 1 per cent for 2010’s third quarter. Business insurance lines, which include directors and officers liability, property & casualty, and employers liability insurance, were all down as well.  With the last increases occurring in 2009’s third quarter, this marks the fourth quarter in a row for such drops to occur.

The quarterly commercial lines survey compared differences in price for 2010’s third quarter against those from last year.  Each quarter is held up in comparison to its previous year’s counterpart.

Towers Watson property and casualty director Bruce Fell issued a statement in regards to the new data.  he claimed that due to the scarcity of large worldwide catastrophes throughout the last few years has resulted in price declines and an excess in capacity.  Mr Fell indicated that results are expected to fare similarly in the near term.  Moreover he stated that management liability line prices appeared to be stabilising from their heightened levels in the wake of the worldwide banking crisis.

The survey found that 2010 loss ratios for accidents had declined by 4 per cent in comparison to last year’s year to date figures.

This 4 per cent is only marginally higher than what the firm originally estimated for its figures for the 2008 to 2009 financial year.  The previous year saw only a 3 per cent deterioration in prices.

The survey indicated that primary drivers of the higher loss ratios for 2010 were due to the inflation of higher claim costs.

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