US commercial insurance rates increase again in fourth quarter

Premium renewal rates for general liability, commercial property, umbrella and workers compensation in the US increased in the fourth quarter, according to IVANS Insurance’s premium renewal rate index. IVANS said commercial property and umbrella ended the year with their highest average premium renewal rate change, while commercial property premium renewal rate change averaged consistently higher compared to all other lines of business in 2020. Workers compensation average premium renewal rate change remained in negative territory, which was consistently negative throughout all of 2020, said IVANS. “While we saw variable changes for all lines of business in 2020, average premium renewal rates for the fourth quarter trended higher than those of the third quarter, with the exception of business owner’s policy (BOP) which decreased and commercial auto which remained virtually the same,” said Kathy Hrach, vice-president of product management, IVANS Insurance. “As we make our way into 2021, the IVANS Index will provide insights on how the macroeconomic trends of the ongoing pandemic and policy changes will impact the insurance industry, providing actionable intelligence for agencies and insurers on policy and renewal conversations and pricing strategies.” Commercial auto premium renewal rate change averaged 4.46% for the quarter and ended the year at 5.03% in December. The average premium renewal rate change experienced a general increase in 2020 compared to 2019 throughout the year, with most months experiencing higher average premium renewal change relative to change in 2019. For BOP, fourth-quarter premium renewal rate change averaged 4.57%, representing a decrease over last quarter’s average of 4.76%. BOP premium renewal rate change finished the quarter at 4.64% in December. Relative to other lines of business, BOP’s average premium renewal rate experienced the second highest change across all months, behind commercial property, said IVANS. Average premium renewal rate change for BOP remained consistently higher in 2020 versus 2019, except for October and December. Fourth-quarter premium renewal rate change for general liability increased from the third quarter, averaging 3.47% compared to 3.44%. The quarter premium renewal rate change ended the year in December with the quarter high of 3.59%. Average premium renewal rate change for general liability experienced an increase in 2020 throughout the year compared to 2019. The fourth-quarter premium renewal rate change for commercial property rose again quarter over quarter, with an average rate change of 5.62% as compared to 5.30% in the third quarter. Commercial property premium renewal rate change reached its high for 2020 in December at 5.68%. The average premium renewal rate change in 2020 for commercial property was higher compared to 2019 across all months, said IVANS. Fourth-quarter premium renewal rate change for umbrella averaged 3.46% versus 3.09% in the third quarter. Umbrella premium renewal rate change reached its quarter low in November at 2.82% and its high in December at 3.79%. Average premium renewal rate change for umbrella in 2020 was higher compared to 2019, except for February. Average premium renewal rate change for workers’ compensation for the fourth quarter reached -2.13%, up from the third-quarter average of -2.41%. Workers compensation ended the year in December on its quarter high at -1.70%. Average premium renewal rate change for workers compensation in 2020 was consistently more positive compared to 2019, except for January and August, said IVANS. Workers compensation average premium renewal rate change did not rise above zero once in 2020.

US commercial insurance rates increase again in fourth quarter

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