Premium Increases Continued Across All Commercial Lines in Q4

The average premium renewal rate change increased year over year across all major commercial insurance lines during the fourth quarter except for workers compensation, according to the IVANS Index, a regular premium renewal rate index compiled by the IVANS insurance exchange service.

Compared to the third quarter of 2023, the year's fourth quarter saw increases in average premium renewal rate changes across all major commercial insurance lines, IVANS said.

Premium renewal rate changes by the line of business during the fourth quarter include the following.

• Commercial auto. The average premium renewal rate change for commercial auto was 8.79 percent during the fourth quarter, reaching a 9.19 percent increase in November, the quarter's high. The quarter's low was an 8.52 percent increase in October.
• Businessowners policy (BOP). The fourth quarter BOP premium renewal rate change averaged 9.12 percent, an increase from the third quarter's average of 7.74 percent. The BOP premium renewal rate change saw its fourth-quarter high of 9.72 percent in December and its quarter low in October at 8.77 percent.
• General liability. The premium renewal rate change for general liability increased to 5.83 percent in the fourth quarter from 5.43 percent in the third quarter. The average premium renewal rate change saw its fourth-quarter low in November at 5.65 percent and its quarter high of 6.16 percent in December.
• Commercial property. The fourth quarter commercial property premium renewal rate change of 10.34 percent was an increase from the 10.08 percent recorded in the prior quarter. The commercial property average premium renewal rate reached its high for the year in December at 10.67 percent, with its quarter low in November at 9.93 percent.
• Umbrella. The average premium renewal rate change for umbrella increased to 6.39 percent in the fourth quarter from 5.29 percent in the third quarter. Umbrella saw its quarter-low average premium renewal rate change in October at 6.22 percent and its quarter-high of 6.62 percent in December.
• Workers compensation. The average premium renewal rate change for workers compensation was 0.64 percent decrease in the fourth quarter, up from a 0.99 percent decrease during the third quarter. Workers compensation began the fourth quarter with its quarter low of a 1.26 percent decrease in average premium renewal rate change in October, hitting its high when it rose above zero for the first time during the year in November with a 0.15 percent increase.

IVANS noted that BOP, general liability, commercial property, and umbrella ended the year with their highest average premium renewal rate change, adding that the 2023 average premium renewal rate change was higher for all lines of business compared to 2022. Commercial property average premium renewal rate change was consistently higher compared to all other lines of business in 2023, IVANS said.

"Premium renewal rate changes continued to increase across all major commercial lines products in Q4, with many reaching year-end highs throughout the quarter. In addition, workers compensation reached its highest rate, rising above zero, in November," Brad Boyer, chief product officer at IVANS, said in a statement.

He continued, "As we begin 2024, we'll be watching the data to see how the hard market trends of 2023 carry into this year and understand the macroeconomic factors impact on renewals and where markets are investing to create the greatest return."