Premium Increases Continue for Most Commercial Lines in First Quarter
April 29, 2022
Premium renewal rates for nearly all major commercial insurance lines continued to increase year over year during the first quarter of 2022, according to the IVANS Index, a regular premium renewal rate index compiled by the IVANS insurance exchange service.
Only workers compensation continued to show a year-over-year decrease in premium renewal rates during the first quarter, IVANS reported.
Average premium renewal rates increased for commercial property and umbrella during the first quarter of 2022 compared to the fourth quarter of 2021. Commercial auto, business owners policy (BOP), general liability, and workers compensation experienced decreases in average premium renewal rates during this year's first 3 months compared to the prior quarter.
Premium renewal rate changes by the line of business during the first quarter of 2022 include the following.
- Commercial auto. The first quarter average premium renewal rate averaged 4.22 percent, a decrease from the fourth quarter of 2021's average premium renewal rate of 4.69 percent. The quarter saw its lowest rate in February at 4.06 percent and ended with its highest rate in March at 4.47 percent.
- BOP. The BOP premium renewal rate dropped in the first quarter with an average of 5.32 percent compared to 5.58 percent during the fourth quarter of 2021. The quarter began and ended with monthly premium renewal rate changes of 5.28 percent and reached its highest rate in February with an average of 5.41 percent.
- General liability. The first quarter premium renewal rate experienced a decrease compared to the fourth quarter of 2021, with an average of 4.3 percent versus 4.41 percent in the prior quarter. The first quarter premium renewal rate experienced its low in February at 4.11 percent and reached its high in March at 4.56 percent.
- Commercial property. The average premium renewal rate change for commercial property increased quarter over quarter to 6.16 percent versus 5.95 percent during the fourth quarter of 2021. The quarter's premium renewal rate experienced its low of 6.01 percent in February and its high in March at 6.29 percent.
- Umbrella. The first quarter premium renewal rate change averaged 5.77 percent, increasing from 5.13 percent during the fourth quarter of 2021. The umbrella premium renewal rate change saw its low of 4.68 percent in February and experienced its high of 7.04 percent in March.
- Workers compensation. The workers compensation premium renewal rate change averaged a 1.23 percent decrease, down from a 1.16 percent decrease during the fourth quarter of 2021. The first quarter's premium renewal rate change reached its high of a 0.95 percent decrease in February and ended the quarter with its low of a 1.48 percent decrease.
"We are seeing that our data is consistent with macroeconomic trends, like inflation, as average premium renewal rates continue to rise," Kathy Hrach, vice president of product management at IVANS Insurance Services, said in a statement. "As these rates rise, we will continue to watch as they show up in the form of profitable earnings by both agents and carriers."
Released on a monthly basis, the IVANS Index analyzes more than 120 million data transactions to measure the premium renewal rate change year over year across the US market.
April 29, 2022