Premium Increases Continued Across Most Lines during Second Quarter
July 22, 2021
Nearly all major commercial insurance lines experienced quarterly increases in average premium renewal rate during the second quarter of 2021, according to the IVANS Index, a regular premium renewal rate index compiled by the IVANS insurance exchange service.
The second quarter results showed premium renewal rate changes for all major commercial lines of insurance increased year over year, except for workers compensation, which remained negative, IVANS said.
Compared to the first quarter of this year, the second quarter showed increases in average premium renewal rate changes in commercial auto, business owners policy (BOP), general liability, and umbrella. Commercial property and workers compensation experienced decreases in average premium renewal rates.
Premium renewal rate changes by line of business in the second quarter of 2021 include the following.
- Commercial auto. Second quarter average premium renewal rate averaged 4.51 percent, an increase from the first quarter's average premium renewal rate of 4.25 percent. The quarter experienced its high in April at 4.65 percent and ended with its low in June at 4.28 percent.
- BOP. BOP premium renewal rate increased in the second quarter with an average of 4.59 percent compared versus 4.53 percent during the first quarter. The second quarter's high rate was in June at 4.66 percent and its low was in May with an average of 4.48 percent.
- General liability. The second quarter premium renewal rate for general liability insurance increased to an average of 3.95 percent from 3.74 percent during the first quarter. The quarter's high rate was in June at 4.07 percent and its low was in May at 3.79 percent.
- Commercial property. The average premium renewal rate change for commercial property insurance decreased quarter over quarter to 5.54 percent during the second quarter from 5.82 percent in the first quarter. The quarter's high premium renewal rate average was in June at 5.68 percent and its low was in May at 5.43 percent.
- Umbrella. The second quarter premium renewal rate change for umbrella insurance coverage averaged 4.40 percent, an increase from 4.24 percent during the first quarter. The quarter recorded its high average in June at 4.60 percent and its low in April at 4.29 percent.
- Workers compensation. The premium renewal rate change for workers compensation averaged a 1.74 decrease during the second quarter, down from a 1.38 percent decrease during the first quarter. The quarter's high renewal rate change was a 1.52 percent decrease in May and the low was in June with a 2.06 percent decrease.
"This quarter's results demonstrate a continued hardening of the market as the average premium renewal rates in most major commercial lines of business increased compared to Q1," Kathy Hrach, vice president of product management, IVANS Insurance, said in a statement.
Released on a monthly basis, the IVANS Index analyzes more than 120 million data transactions to measure premium renewal rate change year over year across the US market.
July 22, 2021