"IVANS Index" Provides Fourth-Quarter and 2017 Year-End Results
January 18, 2018
According to IVANS, an Applied Systems division, 2017's fourth quarter results for the IVANS Index: Premium Renewal Rate Index showed a slight uptick in the premium renewal rate change average across the commercial auto, businessowners policy (BOP), general liability, and commercial property lines compared to the 3rd quarter averages. The report also includes IVANS overall year-end 2017 results.
The umbrella and workers compensation average premium renewal rate change dropped, with the latter remaining in negative premium renewal rate change territory. Notably, across all lines of business, December was consistently one of the greatest premium renewal rate change months for the year.
Premium renewal rate changes by line of business for 4th quarter, as well as 2017 highlights, include the following.
- Commercial Auto: The premium renewal rate change averaged 3.11 percent for the quarter, with a quarter high in November at 3.24 percent and a quarter low of 3.00 percent in December. The year high and low premium renewal rate changes occurred in back-to-back months, with June at 2.41 percent and July at 3.28 percent.
- BOP: The quarter premium renewal rate change averaged 3.85 percent, representing an increase over last quarter's average of 4.79 percent. The BOP premium renewal rate change finished the quarter at 3.79 percent in December. The year high and low premium renewal rate changes occurred in May and October at 4.49 percent and 3.57 percent, respectively.
- General Liability: The 4th quarter premium renewal rate change increased from the 3rd quarter, averaging a 1.86 percent change relative to 1.74 percent. The quarter premium renewal rate change low reached 1.66 percent in November and ended the quarter in December at 2.13 percent.
- Commercial Property: The 4th quarter premium renewal rate change rose again quarter over quarter, with an average rate change of 2.91 percent as compared to 2.48 percent in the 3rd quarter. The year low and high premium renewal rate changes occurred in back-to-back months, with May at 1.46 percent and June at 2.22 percent.
- Umbrella: The 4th quarter premium renewal rate change averaged 1.34 percent versus 0.47 percent in the 3rd quarter. The year high and low premium renewal rate changes occurred in June and September at 3.52 percent and 2.40 percent, respectively.
- Workers Compensation: The average premium renewal rate change reached a year low at -2.32 percent, down from the 3rd quarter average of -1.18 percent. The year low and high premium renewal rate changes occurred in May and August at 0.81 percent and 1.56 percent, respectively.
"2017 was one of the highest loss periods in commercial insurance, with catastrophic natural disasters driving significant claims and premium rate changes for most carriers in the U.S.," said Matt Foran, vice president of IVANS Markets. "Over the past year, the IVANS Index has provided a new view into these movements of the industry on a monthly basis, firmly establishing a new authority for agents and insurers to manage their renewals and pricing models."
The 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 an 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 information. For example, if an insured paid $1,000 for a policy last year and $1,023 this year, the IVANS Index would state that there is a premium renewal rate change of 2.3 percent. The IVANS Index does not use exposure base change or claims experience. Policies with anomalous exposure changes or claims experience are removed from the Index.
January 18, 2018