How Commercial Insurance Rates Changed in Q4 and 2018: IVANS

January 21, 2019

Renewal premium rates for nearly all major commercial insurance lines increased in the fourth quarter of last year with the exception of workers’ compensation where the average rate dropped and remained negative.

The 2018 IVANS Index for Q4 and year-end shows that commercial auto, general liability, commercial property and umbrella all experienced the greatest premium renewal rate change from the year prior in Q4. The Q4 negative change for workers’ compensation was consistent with the full year’s results for that line.

For its index, IVANS, a division of insurance technology firm Applied Systems, analyzes more than 120 million data transactions to measure the premium difference year over year for a single consistent policy. The data is from more than 32,000 agencies and 380 insurers and managing general agencies.

The analysis of premium renewal rate change by line of business for Q4 and 2018 showed:

• Commercial Auto: The increase averaged 4.66 percent for the quarter, with a quarter high in October at 4.81 percent and ending the quarter at its low of 4.51 percent in December. The 2018 average change for commercial auto was higher compared to 2017 throughout the entire year, peaking in September with an average of 4.50 percent in 2018 versus 2.55 percent in 2017.

• Business Owners Policy: The quarterly average change was 4.23 percent, an increase over last quarter’s average of 4.15 percent. BOP’s change finished the quarter at 4.23 percent in December. Relative to other lines, BOP’s average rate had the most variability between 2018 and 2017.

• General Liability: The Q4 increase averaged 2.54 percent relative to 2013’s 2.35 percent. The quarterly change reached its low of 2.23 percent at quarter’s end in December. General liability insurance started out in 2018 in January and February with lower average rates than 2017, 0.44 percent higher from March through the remainder of 2018 and across the same period of time the year prior.

• Commercial Property: The Q4 change rose again quarter over quarter, with an average increase of 3.74 percent compared to 3.34 percent in Q3. The change reached its high for 2018 in Q4 at 3.95 percent in December. The 2018 average change was higher compared to 2017, with the exception of June at 3.24 percent in 2018 versus 3.52 percent in 2017.

• Umbrella: The Q4 increase averaged 2.42 percent versus 1.93 percent in Q3. Umbrella’s increase reached its high for 2018 in Q4 at 2.76 percent in November. The average change in 2018 was .70 percent higher than 2017.

• Workers’ Compensation: The average change for the quarter fell to -3.04 percent, down from a Q3 average of -2.76 percent. The 2018 average was consistently more negative compared to 2017, with the exception of December, which ended at -2.66 percent in 2018 versus -2.92 percent in 2017. Workers’ compensation average rates have not increased since May 2017.

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