Premium Increases Continued Across Most Commercial Lines in Q4
January 27, 2023
The average premium renewal rate change increased year over year across all major commercial insurance lines during the fourth quarter except for workers compensation, according to the Ivans Index, a regular premium renewal rate index compiled by the Ivans insurance exchange service.
Workers compensation closed 2022 with negative year-over-year premium renewal growth for the sixth consecutive year, according to Ivans.
Compared to the third quarter of 2022, the year's fourth quarter saw increases in average premium renewal rate changes across most major commercial insurance lines except umbrella and workers compensation, Ivans said.
Premium renewal rate changes by the line of business during the fourth quarter include the following.
- Commercial auto. The average premium renewal rate change for commercial auto was 5.62 percent during the fourth quarter, ending the year with a 6.13 percent increase in December, the quarter's high. The quarter's low was a 5.12 percent increase in October.
- Business owners policy (BOP). The fourth quarter BOP premium renewal rate change averaged 7.01 percent, an increase from the third quarter's average of 6.45 percent. The BOP premium renewal rate change saw its fourth-quarter high of 7.23 percent in December and its quarter low in November at 6.66 percent.
- General liability. The premium renewal rate change for general liability increased to 5.49 percent in the fourth quarter from 5.01 percent in the third quarter. The average premium renewal rate change saw its fourth-quarter low in October at 5.24 percent and its quarter high of 5.71 percent in December.
- Commercial property. The fourth quarter commercial property premium renewal rate change of 7.95 percent was an increase from the 6.95 percent recorded in the prior quarter. The commercial property average premium renewal rate high reached its high for the year in December at 8.38 percent, with its quarter low in November at 6.4 percent.
- Umbrella. The average premium renewal rate change for umbrella decreased to 4.94 percent in the fourth quarter from 5.21 percent in the third quarter. Umbrella saw its quarter low average premium renewal rate change in October at 4.44 percent and its quarter high of 5.35 percent in December.
- Workers compensation. The average premium renewal rate change for workers compensation decreased by 1.66 percent in the fourth quarter, down from a 1.08 percent average decrease during the third quarter. Workers compensation began the fourth quarter with its quarter high of a 1.01 percent decrease in average premium renewal rate change in October, hitting its low in November with a 1.77 percent decrease.
Ivans noted that commercial auto, BOP, general liability, and commercial property all ended the year with their highest average premium renewal rate change. The premium renewal rate change for commercial property averaged consistently higher than those of other lines of business in 2022, Ivans said.
"2022's hard market was reflected in this year's Ivans Index, showing continued elevation in average premium renewal rates consistently across most major commercial lines," Kathy Hrach, vice president of product management at Ivans, said in a statement.
January 27, 2023