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June "IVANS Index" Shows Commercial Lines Premiums Remain Up, Workers Comp Moves into Negative Territory

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July 13, 2017

IVANS, a division of Applied Systems, recently announced the commercial lines premium results for June's IVANS Index: Premium Renewal Rate Index report. Second-quarter results show a slight uptick in premium renewal rate change average across business owners policy (BOP), commercial property, and workers compensation compared to first quarter; however, workers compensation has moved back into negative premium renewal rate change territory at the end of second quarter, following positive territory in May.  

Premium renewal rate change by line of business for second quarter includes the following.

  • Commercial Auto: Premium renewal rate change averaged 2.57 percent for the quarter, ending at 2.41 percent for June; premium renewals have held steady in a very narrow range of 2.66 percent for the quarter.

  • BOP: Quarter premium renewal rate change averaged 4.21 percent, representing an increase over last quarter’s average of 3.89 percent. BOP premium renewal rate change finished the quarter at 4.11 percent in June.

  • General Liability: Second-quarter premium renewal rate change was slightly more variable relative to first quarter. The quarter premium renewal rate change low reached 1.46 percent in May and ended the quarter in June at 2.22 percent.

  • Commercial Property: Second quarter reversed the downward premium renewal rate change trend of first quarter, with rates moving to 3.52 percent in June from an average of 2.66 percent in first quarter.

  • Umbrella: Quarter premium renewal rate change averaged 0.94 percent versus 1.04 percent in first quarter. 

  • Workers Compensation: Second quarter experienced the first positive premium renewal rate change of 2017 in May at 0.58 percent, but quarterly average remained in negative territory at -0.16 percent.

“Premium renewal rate change across the industry remained consistent for the quarter, with greater variability experienced by general liability and workers compensation insurance,” said Matt Foran, vice president of IVANS Marketplace. “IVANS Index continues to provide unique data insights on premium renewal trends that are influencing renewal and pricing strategies.”

Released on a monthly basis, IVANS Index is a data-driven report of current conditions and trends for premium rate renewal change of the most placed commercial lines of business in the insurance industry. Analyzing more than 120 million data transactions, the IVANS Index premium renewal rate change measures the year-over-year premium difference for a single consistent policy. Inclusive of more than 30,000 agencies and 380 insurers and managing general agents, the IVANS Index is reflective of the premium rate change trends being experienced by all agencies and insurers across the US insurance market.

To derive the change in cost, IVANS uses policies that have the same insured, insurer, product type, policy number, expiration date, effective date, and producing agency. For example, if an insured paid $1,000 for a policy last year and $1,023 this year, IVANS Index would state that there is a premium renewal rate change of 2.3 percent. IVANS Index does not use exposure base change or claims experience. Policies with anomalous exposure changes or claims experience are removed.

For previous IVANS results, read the Captive.com articles "The May IVANS Index Shows Positive Commercial Lines Premiums" and "IVANS Index Reveals Rising Commercial Lines Premiums in April."

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