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General Commercial Lines Hardening, According to IVANS

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October 15, 2018

IVANS has announced the IVANS Index: Premium Renewal Rate Index third-quarter results. The results showcased an increase in premium renewal rate change across nearly all of the commercial lines of business compared to the second quarter, except for businessowners policy and workers compensation, which experienced a decrease in rate change.

Premium renewal rate change by line of business for third-quarter 2018 highlights include the following.

  • Commercial auto: 4.48 percent average increase ending at 4.50 percent for September
  • Businessowners policy: 3.77 percent average increase compared to second quarter's 4.00 percent average and finishing September at 3.57 percent
  • General liability: 2.35 percent increase ending the quarter at 2.29 percent
  • Commercial property: 3.34 percent average, an increase over second quarter, ending September at 4.36 percent
  • Umbrella: 1.93 percent average increase versus 1.77 percent in second-quarter 2018, September premium renewal rate change finished at 2.30 percent
  • Workers compensation: -2.76 percent average decrease as compared to -2.49 percent decrease in second-quarter 2018

"As the vast array of pricing drivers, including tariffs, storm losses, etc., play a part in the very dynamic nature of insurance pricing, the latest figures for the IVANS Index show a slight increase quarter over quarter and demonstrate a general hardening of the commercial lines market," said Brian Wood, vice president of IVANS Markets, IVANS Insurance Solutions. "The IVANS Index continues to provide insights into overall health of the industry and most profitable opportunities for both agents and insurers."

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 it 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.

The complete IVANS Index report is available on the IVANS website.

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