How Commercial Insurance Rates Changed in Q4 and 2018: IVANS
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% for the quarter, with a quarter high in October at 4.81% and ending the quarter at its low of 4.51% 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% in 2018 versus 2.55% in 2017.
- Business Owners Policy: The quarterly average change was 4.23%, an increase over last quarter’s average of 4.15%. BOP’s change finished the quarter at 4.23% in December. Relative to other lines of business, BOP’s average rate experienced the most variability between 2018 and 2017.
- General Liability: The Q4 increase averaged 2.54% relative to 2013’s 2.35%. The quarterly change reached its low of 2.23% at quarter’s end in December. General liability started out 2018 in January and February with lower average rates than 2017, 0.44% higher from March through the remainder of 2018 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% compared to 3.34% in Q3. The change reached its high for 2018 in Q4 at 3.95% in December. The 2018 average change was higher compared to 2017, with the exception of June at 3.24% in 2018 versus 3.52% in 2017.
- Umbrella: The Q4 increase averaged 2.42% versus 1.93% in Q3. Umbrella’s increase reached its high for 2018 in Q4 at 2.76% in November. The average change in 2018 was .70% higher than 2017.
- Workers’ Compensation: The average change for the quarter fell to -3.04%, down from Q3 average of -2.76%. The 2018 average was consistently more negative compared to 2017, with the exception of December, which ended at -2.66% in 2018 versus -2.92% in 2017. Worker’s compensation average rates have not increased since May 2017.
“The end of 2018 experienced the greatest change in premium renewal rates from the year prior for nearly all major commercial lines products,” said Brian Wood, vice president of Data Products Group, IVANS Insurance.