Commercial lines pricing increased again in the first quarter of 2023. Unsurprisingly, the price of commercial property insurance increased the most, according to WTW's “Commercial Lines Pricing Survey" (CLIPS). Overall, the aggregate price change for lines of U.S. commercial insurance was up 5.6% for the first quarter, compared to the 4.8% increase in the fourth quarter of 2022.

The first quarter saw moderate to significant price increases in all lines except workers compensation, directors & officers liability and cyber, according to WTW. There was a slight price reduction for workers compensation while D&O experienced another quarter of price decreases similar to the fourth quarter of 2022.

Commercial property and commercial auto liability both saw double-digit price increases, with commercial auto experiencing reported price increases near or above double digits for the 22nd consecutive quarter. Excess or umbrella liability saw the third-largest price increase, with significantly accelerating prices over the previous 15 quarters.

“Rates continued to harden across nearly all lines of coverage in the first quarter, with an aggregate price increase higher than in the prior quarter, driven primarily by the double-digit increase from commercial property, constrained by the impact of recent high inflation," said Yi Jing, director, insurance consulting and technology, WTW.

Cyber, which wasn't introduced into the survey until the fourth quarter of 2021 because the volume of written business had been much smaller than other lines, continued to show a slowdown in its price change in the first quarter of 2023. However, this is a recent shift in direction, having just begun to slow down in the third quarter of 2022. In 2022's third quarter, cyber led commercial lines rate increases, but with a significant drop from the 2022's second quarter—this was after the prior two years seeing double- and even triple-digit premium increases. 

A rough property market in both commercial and personal lines is causing several carriers to withdraw from writing certain lines of business, especially in areas impacted by catastrophes. State Farm recently announced that it was no longer accepting new applications for homeowners or commercial property insurance in California. Just two other examples, Allstate recently announced it had exited the California property market last year, and AIG left the standard California market in January 2022.

AnneMarie McPherson Spears is IA news editor.