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U.S. commercial insurance rates continue downward trend, dropping to 5.3% increase

1. Commercial insurance rates increased by 5.3% in Q1 2025. 2. Rate growth is slower compared to past two quarters. 3. Commercial Auto had higher rates; Commercial Property showed lower increases. 4. Positive sign for buyers; pricing challenges remain in specific areas. 5. WTW aids organizations through data-driven risk and capital solutions.

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FAQ

Why Bullish?

The steady increases, although slower, indicate a resilient market for WTW. Historically, similar trends have correlated with sustained revenue growth in the insurance sector, although potential volatility in segments like Commercial Auto could impact margins.

How important is it?

The article provides insights into pricing trends which are crucial for WTW's core operations, justifying a solid likelihood of impacting stock performance.

Why Short Term?

The immediate effects of these pricing trends are likely to influence WTW's financials in the near term as rate changes directly impact premium income and market competitiveness.

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Commercial Lines Insurance Pricing Survey: Q1 2025 June 10, 2025 11:17 ET  | Source: Willis Towers Watson US LLC NEW YORK, June 10, 2025 (GLOBE NEWSWIRE) -- While U.S. commercial insurance rates demonstrated an increase of 5.3% in the first quarter, the rate continued a downward trajectory compared with the prior two quarters (increases of 5.8% and 5.6%), according to the latest findings from WTW's Commercial Lines Insurance Pricing Survey (CLIPS). The survey compares premiums for policies underwritten during the first quarter of 2025 to those for the same coverage lines in the respective quarter of 2024, demonstrating a year-over-year comparison. Carriers reported an aggregate price increase of 5.3% in the first quarter, down from 6.3% recorded in the first quarter of 2024. Some coverage lines stood out with respect to price change rates in the quarter. Notably, Commercial Auto maintained a double digit increase but lower than prior quarter, while Commercial Property continued a strong downward pricing trend, with just a slight increase for the first quarter, compared to double digit increase a year prior. Additionally, Professional Liability rates displayed a higher increase this quarter but is still relatively low compared to most of the other lines. Yi Jing, Senior Director, Insurance Consulting and Technology (ICT) at WTW, commented, "In the first quarter, we witnessed some interesting trends. Overall, the continued reduction in rate increases is a positive sign for buyers. However, consistent double-digit rate jumps for areas like Commercial Auto signify continued pricing difficulty in the market. The only other coverage area maintaining double digit rate increases is Excess / Umbrella Liability." CLIPS is a retrospective look at historical changes in Commercial Property & Casualty insurance (P&C) prices and claims cost inflation. A forward-looking analysis of Commercial P&C trends, outlook, and rate predictions can be found in WTW’s Insurance Marketplace Realities series.  About WTW At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance. Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. About CLIPS CLIPS data are based on both new and renewal business figures obtained directly from carriers underwriting the business. CLIPS participants represent a cross-section of U.S. P&C insurers that includes many of the top ten commercial lines companies and the top 25 insurance groups in the U.S. This survey compared prices charged on policies written during the first quarter of 2025, with the prices charged for the same coverage during the same quarter of 2024. For this most recent survey, 41 participating insurers representing approximately 20% of the U.S. commercial insurance market (excluding state workers compensation funds) contributed data. Media Contact Douglas MenellyDouglas.Menelly@wtwco.com +1 (516) 972-0380 Arnelle SullivanArnelle.Sullivan@wtwco.com +1 (718) 208-0474

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