Premium Increases Continue Across Most Major Lines in Fourth Quarter

Commercial insurance premium renewal rates were up across nearly all major coverage lines in the fourth quarter of 2020, according to the January IVANS Index, a regular premium renewal rate index compiled by the IVANS insurance exchange service.

The fourth quarter saw increases in the premium renewal rate change average across general liability, commercial property, umbrella, and workers compensation compared to the third quarter, according to IVANS. The average premium renewal rate change for workers compensation remained in negative territory, however, and was consistently negative throughout 2020, IVANS found.

Commercial property and umbrella ended the year with their highest average premium renewal rate change, IVANS said.

During 2020, the average premium renewal rate change was variable for all lines of business compared to 2019, IVANS said, with commercial property premium renewal rate changes averaging consistently higher compared to other lines of business in 2020.

Premium renewal rate changes by line of business in the fourth quarter and 2020 highlights included the following.

• Commercial auto. The premium renewal rate change averaged 4.46 percent for the quarter and ended the year at 5.03 percent in December, the quarter high. The quarter low was in November at 3.93 percent.
• Businessowners policy (BOP). The fourth-quarter renewal rate changes averaged 4.57 percent, a decrease from the prior quarter's average of 4.76 percent. BOP premium renewal rate changes finished the quarter at 4.64 percent in December.
• General liability. The fourth-quarter premium renewal rate changes increased to 3.47 percent from the third quarter's 3.44 percent. The further quarter's premium renewal rate change hit its low of 3.38 percent in October and ended the year in December with the quarter high of 3.59 percent.
• Commercial property. The fourth-quarter premium renewal rate change increased to 5.62 percent from 5.30 percent in the third quarter. The premium renewal rate change for commercial property reached its 2020 high in December at 5.68 percent.
• Umbrella. The fourth-quarter premium renewal rate change averaged 3.46 percent versus 3.09 percent in the fourth quarter. The premium renewal rate change for umbrella coverage reached its quarter low in November at 2.82 percent and its high in December at 3.79 percent.
• Workers compensation. The average premium renewal rate change for the fourth quarter was -2.13 percent, up from the third-quarter average of -2.41 percent. The average premium renewal rate change for workers compensation hit its quarter high in December at -1.70 percent.

"While we saw variable changes for all lines of business in 2020, average premium renewal rates for Q4 trended higher than those of Q3, with the exception of BOP which increased and commercial auto which remained virtually the same," Kathy Hrach, vice president of Product Management, IVANS Insurance, said in a statement.

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.