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IVANS September: Workers Compensation Renewal Rate Dips Again in the Third Quarter

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October 10, 2017

IVANS, a division of Applied Systems, has announced the third quarter results in IVANS Index: Premium Renewal Rate Index. Third quarter results showed variable premium renewal rate change average across business owner's policy (BOP), commercial property, and workers compensation compared to the second quarter. Workers compensation remains the only line of business experiencing negative premium renewal rate change.   

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

  • Commercial auto: The premium renewal rate change averaged 3 percent for the quarter (up from the second quarter), ending at 2.55 percent for September.

  • BOPThe quarter premium renewal rate change averaged 3.79 percent, representing a decrease over last quarter's average of 4.21 percent. The BOP premium renewal rate change finished the quarter at 3.87 percent in September. 

  • General liability: The third quarter premium renewal rate change experienced limited variability relative to the second quarter. The quarter premium renewal rate change low reached 1.68 percent in August and ended the quarter in September at 1.70 percent.

  • Commercial property: The third quarter premium renewal rate change decreased quarter-over-quarter, with an average rate change of 2.48 percent as compared to 3.08 percent in the second quarter.

  • Umbrella: The quarter premium renewal rate change averaged 1.47 percent versus 0.94 percent in the second quarter. 

  • Workers compensation: The premium renewal rate change dipped again in the third quarter, averaging at -1.18 percent as compared to -0.16 percent in the second quarter.

"Premium renewal rate change across the industry remained consistent for the quarter, with greater variability experienced by Commercial Property and Workers Compensation insurance quarter-over-quarter," said Matt Foran, vice president of IVANS Markets. "IVANS Index continues to demonstrate positive momentum for the market and highlight the most profitable opportunities for the industry."

IVANS Index, released monthly, is a data-driven report on conditions and trends for premium rate renewal change of the most-placed commercial lines of business in the insurance industry. Based on analysis of more than 120 million data transactions, the IVANS Index premium renewal rate change measures the premium difference year over year for a single, consistent policy. It includes more than 30,000 agencies and 380 insurers and managing general agents, and reflects premium rate change trends experienced by all agencies and insurers across the US insurance market. IVANS Index is available to agencies and insurers as part of IVANS's "Market Insights."

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.

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