Fourth-quarter 2020 insurance premium renewals mostly up
Regular reporting from IVANS® provides a look at the trends and pressures impacting the insurance industry.
IVANS® recently released the results on its year-end 2020 premium renewal research known as the IVANS Index™.
The results indicated an increase in the premium renewal rate changes average across the general liability, commercial property, umbrella and workers’ comp insurance markets compared to Q3 2020. However, workers’ compensation average premium renewal rate change remained in negative territory, which was consistent with that product’s performance throughout 2020.
“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 for IVANS Insurance, said in a recent press release. “As we make our way into 2021, 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.”
2020 average premium renewal rate change was variable for all lines of business compared to 2019. Commercial property premium renewal rate change averaged consistently higher compared to all other lines of business in 2020.
Here’s a closer look at Q4 2020 premium renewal rate changes by line of business, according to the IVANS Index™:
- Commercial auto: Premium renewal rate change averaged 4.46% for the quarter and ended the year at 5.03% in December, which was also the quarter high. The quarter low was in November at 3.93%.
- Business owners’ policies: 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.
- General liability: Q4 premium renewal rate change increased from Q3, averaging 3.47% relative to 3.44%. The quarter premium renewal rate change reached its low of 3.38% at the start of the quarter in October and ended the year in December with the quarter high of 3.59%.
- Commercial property: Q4 premium renewal rate change rose again quarter over quarter, with an average rate change of 5.62% compared to 5.30% in Q3. Commercial property premium renewal rate change reached its high for 2020 in December at 5.68%.
- Umbrella: Q4 premium renewal rate change averaged 3.46% versus 3.09% in Q3. Umbrella premium renewal rate change reached its quarter low in November at 2.82% and its high in December at 3.79%.
- Workers’ compensation: Average premium renewal rate change for the quarter reached -2.13%, up from the Q3 average of -2.41%. Workers’ compensation ended the year in December at its quarter high at -1.70%.
IVANS® is a division of Applied Systems®. The IVANS Index is a data-driven report of current conditions and trends for premium rate renewal change of the most placed commercial lines of business in the insurance industry. Click here to download the complete Q4 and year-end 2020 IVANS Index report.
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