January 2020 Commercial Lines Premium Renewal Rates Moving Up

IVANS announced the IVANS Index: Premium Renewal Rate Index January 2020 results. Year over year, nearly all lines of business experienced an increase in average premium renewal rate except workers compensation, which saw a negative turn.

Month over month, January premium renewal rates experienced variable change across the majority of the commercial lines products, with upticks for general liability, commercial property, umbrella, and workers compensation. Commercial auto and businessowners policy saw negative changes.

The premium renewal rate change highlights by the line of business for January 2020 include the following.

• Commercial auto—4.09 percent, down from 5.12 percent the month prior
• Businessowners policy—4.4 percent, down from 4.75 percent at the end of December
• General liability—3.02 percent, up from 2.78 percent the month prior
• Commercial property—4.86 percent, up from 4.65 percent in December
• Umbrella—3.08 percent, up from 2.71 percent the month prior
• Workers compensation— -1.63 percent, up from -3.05 percent at the end of December

"As we kick off 2020, we continue to see the broad trend of increases in year over year premium renewal rate changes for major commercial lines, including workers compensation, which had a significant uptick relative to prior months," said Brian Wood, vice president of Data Products Group, IVANS Insurance Services.

IVANS Index, released monthly, is a data-driven report on conditions and trends for premium rate renewal change of the most-placed commercial lines of business in the insurance industry. Based on the analysis of more than 120 million data transactions, the IVANS Index premium renewal rate change measures the premium difference year over year for a single consistent policy. It includes more than 32,000 agencies and 400 insurers and managing general agents, and it reflects premium rate change trends experienced by all agencies and insurers across the US insurance market. IVANS Index is available to agencies and insurers as part of IVANS's "Market Insights."

To derive the change in cost, IVANS uses policies that have the same insured, insurer, product type, policy number, expiration date, effective date, and producing agency. For example, if an insured paid $1,000 for a policy last year and $1,023 this year, IVANS Index would state that there is a premium renewal rate change of 2.3 percent. IVANS Index does not use exposure base change or claims experience. Policies with anomalous exposure changes or claims experience are removed.