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IVANS: First Quarter Renewal Rates Experience Continued Increase

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April 23, 2019

IVANS has announced the IVANS Index: Premium Renewal Rate Index results for first quarter 2019. The first quarter results showed an increase in premium renewal rate change average across commercial auto, businessowners policy, umbrella, and commercial property compared to fourth quarter 2018; however, general liability renewal rate change experienced a decrease, and workers compensation average premium renewal rate change dropped in March and remained in negative territory, consistent with the year-end 2018 results. Notably, commercial auto, businessowners policy, commercial property, and umbrella experienced higher average premium renewal rate change from the prior quarter.

Premium renewal rate change by line of business for first quarter 2019 highlights include the following.

  • Commercial Auto: Averaged 4.53 percent for the quarter, with a quarter high in February at 4.61 percent. February marked the first quarter premium renewal rate change high for both 2018 and 2019.

  • Businessowners Policy: First quarter averaged 4.19 percent, representing an increase over last quarter’s average of 4.00 percent. Businessowners policy premium renewal rate change finished the quarter at 4.39 percent in March.

  • General Liability: First quarter decreased from fourth quarter, averaging 1.67 percent change relative to 2.54 percent. The quarter premium renewal rate change reached its low of 1.16 percent in January.

  • Commercial Property: First quarter increased to 4.24 percent, reaching a quarter high in February at 4.58 percent.

  • Umbrella: First quarter averaged 2.54 percent versus 2.42 percent in fourth quarter. Umbrella premium renewal rate change for the quarter reached its high in February at 3.06 percent.

  • Workers Compensation: Average premium renewal rate change for the quarter reached -2.95 percent, a slight increase from the fourth quarter average of -3.04 percent, but dropped at the end of the quarter relative to the end of first quarter 2018 at -4.43 percent in March 2019 versus -2.79 percent in March 2018.

"Similar to the end of 2018, premium renewal rates experienced a continued increase compared to the prior year, with the exception of general liability and workers compensation, which experienced downward trends," said Brian Wood, vice president of Data Products Group, IVANS Insurance.

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 32,000 agencies and 400 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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