The Credibility of WTW's Pricing Survey: Insights for Insurance Negotiators and Consumers
- Andrea Luoni
- Nov 17
- 3 min read
Insurance pricing reports often shape expectations for businesses and negotiators alike. The recent WTW pricing survey, which showed an aggregate increase of just above 6 percent in U.S. commercial insurance prices, has sparked conversations about its reliability and practical value. As a professional insurance negotiator, I find this report interesting but also recognize its limitations. This post explores how much weight to give the WTW pricing survey, why discrepancies occur between survey predictions and actual premium changes, and how negotiators can use data and experience to secure better outcomes for clients.
Understanding What the WTW Pricing Survey Represents
The WTW pricing survey collects data from a wide range of insurance carriers and brokers to provide an overview of market trends. It aggregates pricing changes across various commercial insurance lines, offering a snapshot of the industry’s direction. This kind of report is valuable because it:
Reflects broad market movements
Highlights emerging pricing trends
Provides benchmarks for average rate changes
However, it is important to remember that the survey is a summary of many individual experiences rather than a precise forecast for any single business. Each company’s risk profile, claims history, industry sector, and negotiation leverage differ significantly. Therefore, the survey’s aggregate numbers cannot predict exact premium changes for every insured.
Why the Survey May Not Match Individual Outcomes
A recent client experience illustrates this gap clearly. Their agent, affiliated with WTW, predicted a 20% increase across most coverage lines and only a 5% rise in workers compensation during a pre-renewal meeting. Yet, after thorough negotiation, the client’s premiums decreased by 10% to 35% on all lines.
How could the agent have been so off? Several factors explain this:
Conservative estimates: Agents may provide cautious projections to prepare clients for potential increases.
Market averages vs. individual risk: The survey reflects averages, but individual risk profiles can lead to better or worse pricing.
Negotiation skill and timing: Effective negotiation can uncover better terms, discounts, or alternative carriers.
This example shows that while the WTW survey offers a useful market overview, it should not be the sole basis for setting client expectations.
The Importance of Individualized Benchmarking
Every business is unique. Over 30 years of collecting benchmarking data, we have learned that no two companies are alike in their insurance needs or risk exposures. This makes relying solely on broad surveys risky.
Instead, successful negotiation depends on:
Detailed knowledge of the client’s risk profile
Historical premium and claims data and LOSS RATIO
Understanding carrier profit margins and pricing strategies
Knowing the best prices ever seen for specific coverages
Combining these insights helps identify when a quoted premium is fair or inflated. It also guides the search for the right number from carriers without sacrificing coverage quality.
How to Use the WTW Survey Effectively
The WTW pricing survey should be one tool among many. Here are practical ways to use it:
Set a market context: Use the survey to understand general pricing trends and industry pressures.
Compare with internal data: Align survey findings with your own benchmarking and client history.
Prepare negotiation strategies: Anticipate carrier positions based on market movements.
Educate clients: Help clients understand why their premiums may differ from survey averages.
By treating the survey as a starting point rather than a final answer, negotiators can better manage expectations and outcomes.
Why Agents Might Propose High Rate Increases
Agents sometimes present high premium increase estimates for several reasons:
Risk management: Preparing clients for worst-case scenarios avoids surprises.
Market uncertainty: Volatile markets and claims trends can justify caution.
Limited negotiation: Some agents may not fully explore all options or discounts.
Client communication: Simplifying complex pricing into a single number can lead to overestimation.
Agents compensation: Agents make more money when the premiums rise if on commission.
Clients benefit when agents combine transparency with proactive negotiation to find the best possible terms.
Ensuring Adequate Coverage While Negotiating Price
Price is important, but coverage quality cannot be compromised. When negotiating, it is essential to:
Confirm that coverage limits meet client needs
Avoid major exclusions that increase risk
Understand policy terms and conditions clearly
Balance cost savings with protection adequacy
Our clients often improve coverage and reduce cost; they are not mutually exclusive of one another.
Final Thoughts on Using Pricing Surveys and Negotiation
The WTW pricing survey offers valuable insights into commercial insurance pricing trends and how agents will frame the market, the survey should not be viewed as a definitive guide for individual premiums. Each business’s insurance needs and risk profiles are unique, and skilled negotiation combined with deep benchmarking knowledge can lead to better pricing outcomes than survey averages suggest.
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