IVANS: Commercial Lines Premium Renewal Rates Continue To Increase

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October 10, 2019 |

A red arrow with a percent sign curving upward

IVANS announced the IVANS Index: Premium Renewal Rate Index Q3 2019 results. Year over year, commercial auto, businessowners policy, general liability, umbrella, and commercial property all experienced an increase in average premium renewal rate change in Q3 while workers compensation remains in negative territory.

Quarter over quarter, there was greater variability in average premium renewal rate change. Businessowners policy and commercial auto all experienced very slight decreases compared to Q2; however, commercial property, umbrella, general liability, and workers compensation average premium renewal rate change increased relative to the prior quarter.

The premium renewal rate change highlights by line of business for 3Q 2019 include the following.

  • Commercial auto: 4.32 percent average with a quarter high of 4.49 percent in August
  • Businessowners policy: 4.17 percent average, finishing the quarter at 4.09 percent in September
  • General liability: 2.51 percent relative to 2.29 percent in Q2 with Q3 premium renewal rate change reaching its low of 2.20 percent in July
  • Commercial property: 4.20 percent increase, reaching a quarter high in September of 4.35 percent
  • Umbrella: 2.66 percent average versus 2.59 percent in Q2 with a Q3 high of 2.92 percent in August
  • Workers compensation: -2.92 percent average, up from -3.56 percent average in Q2

"From Q3 2018 to Q3 2019, most commercial lines premium renewal rates have increased, with the exception of workers compensation, which continues to trend down," said Brian Wood, vice president of Data Products Group, IVANS Insurance. "Our numbers continue to show prices increasing…"

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 the 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.

October 10, 2019