Premium Increases Continued Across Nearly All Lines in Fourth Quarter

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February 03, 2022

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Nearly all major commercial insurance lines showed increases in year-over-year premium renewal rate changes during the fourth quarter of 2021, according to the IVANS Index, a regular premium renewal rate index compiled by the IVANS insurance exchange service.

The average premium renewal rate change for workers compensation remained negative in the fourth quarter, as it had throughout 2021, IVANS reported.

Compared to the third quarter of 2021, the fourth quarter saw increases in average premium renewal rate changes across all major commercial lines of business, IVANS said.

Premium renewal rate changes by line of business in the fourth quarter of 2021 include the following.

  • Commercial auto. The average premium renewal rate change averaged 4.69 percent for the fourth quarter, ending the year with the quarter low of 4.55 percent in December. The quarter high was 4.89 percent in November.
  • Businessowners policy (BOP). The fourth-quarter premium renewal rate change averaged 5.58 percent, an increase from the third quarter's 5.05 percent. The BOP premium renewal rate finished the fourth quarter at 5.77 percent in December.
  • General liability. The fourth-quarter premium renewal rate increased to an average of 4.41 percent from 4.21 percent in the third quarter. The quarter's low average premium renewal rate was 4.18 percent in October, while the high was 4.78 percent in December.
  • Commercial property. The average premium renewal rate rose to 5.95 percent in the fourth quarter from 5.77 percent the prior quarter. The average premium renewal rate for commercial property hit a 2021 high in December at 6.14 percent.
  • Umbrella. The fourth-quarter premium renewal rate averaged 5.13 percent, up from 4.85 percent in the third quarter. The average premium renewal rate for umbrella coverage reached its quarter low in November at 4.97 percent and its high in December at 5.40 percent.
  • Workers compensation. The average premium renewal rate for the quarter decreased 1.16 percent, up from a 1.40 percent decrease during the third quarter. Workers compensation started the quarter at its low with a 1.57 percent average decrease in October and reached its high in November with a 0.75 percent decrease.

IVANS noted that BOP, general liability, commercial property, and umbrella all ended the year with their highest average premium renewal rate change. Property premium renewal rate changes averaged consistently higher than those of other coverage lines during 2021, IVANS said.

"Most major commercial lines of business ended the year with their highest average premium renewal rates since the IVANS Index began in 2017," Kathy Hrach, vice president of product management, IVANS Insurance, said in a statement. "As the average premium renewal rate changes become influenced by macroeconomic trends like inflation and economic uncertainty, we will continue to track how these commercial lines of business fair in 2022."

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.

February 03, 2022