"IVANS Index" Provides First Quarter 2018 Results

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April 09, 2018

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IVANS, a division of Applied Systems, has announced the results of 2018's first quarter IVANS Index: Premium Renewal Rate Index. First-quarter results showed a positive uptick in the premium renewal rate change average across nearly all lines of commercial business, including commercial auto, business owner's policy (BOP), commercial property, umbrella, and general liability compared to fourth quarter 2017; however, workers compensation demonstrated slightly negative premium renewal rate change during the quarter.

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

  • Commercial auto: The premium renewal rate change averaged 4.20 percent for the first quarter, ending at 3.87 percent in March.

  • BOP: The quarter premium renewal rate change averaged 4.00 percent, representing an increase over last quarter's average of 3.85 percent. The BOP renewal rate change finished the quarter at 4.29 percent.

  • General liability: The first-quarter premium renewal rate change experienced an uptick at 2.01 percent compared to the fourth quarter, which averaged 1.86 percent. The general liability renewal rate reached 2.24 percent at the end of March.

  • Commercial property: The first-quarter premium renewal rate change increased quarter-over-quarter, with an average rate change of 3.11 percent as compared to 2.91 percent in the fourth quarter of last year.

  • Umbrella: The quarter premium renewal rate change spiked in March, finishing the quarter at 2.13 percent and increasing the first quarter average to 1.49 percent from 1.34 percent in Q4.

  • Workers compensation: The premium renewal rate change dipped again in the first quarter, averaging at -2.47 percent as compared to -2.32 percent in the fourth quarter.

"Quarter-over-quarter, premium renewal rate change continues to show significant positive momentum across the majority of commercial lines," said Brian Wood, vice president of IVANS Markets.

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.

April 09, 2018