The Connected Business of Insurance
January 15, 2018
IVANS Index is a data-driven report of current conditions and trends for premium renewal rate change of the most placed commercial lines of business in the insurance industry. Data collected in the IVANS Index enables insurers to determine competitive rates and the most profitable lines of business for investment. To learn more about IVANS Index, read IVANS Index: Get Ahead of Renewal Pricing for Your Clients.
Year-End Results Show Positive Change Across Nearly All Major Commercial Product Lines
2017 was one of the highest loss periods in commercial insurance, with catastrophic natural disasters driving significant claims and premium rate changes for most carriers in the U.S. Fourth quarter results showed a slight uptick in premium renewal rate change average across Commercial Auto, Business Owner’s Policy, General Liability, and Commercial Property compared to Q3; however, Umbrella and Workers’ Compensation average premium renewal rate change dropped. Worker’s Comp remained in negative territory, making May the only month in 2017 that experienced positive change.
Q4 2017 key findings in premium renewal rate change include:
- Commercial Auto: 3.11% for the quarter, with a quarter high in November at 3.24% and ending the quarter at its low of 3.00% in December.
- BOP: 3.85%, increasing over last quarter’s average of 4.79%. BOP premium renewal rate change finished the quarter at 3.79% in December.
- General Liability: 1.86% quarterly change versus a Q3 average of 1.74%. The low reached 1.66% in November and ended the quarter in December at 2.13%.
- Commercial Property: 2.91% in Q4 as compared to 2.48% in Q3. The year low and high came back-to-back, with May at 1.46% and June at 2.22%.
- Umbrella: 1.34% vs. 0.47% in Q3. The year low and high premium renewal rate change occurred in May and August at 0.81% and 1.56% respectively.
- Workers’ Compensation: -2.32%, down from Q3 average of -1.18%, marking the lowest average of the year.
Umbrella averaged 1.34% in Q4 versus 1.47% in Q3, with a six month average of 1.41%. Premium renewal rate change reached a quarterly high at 1.49% in December and low at 1.19% the month prior.
Workers’ Comp averaged -2.32% in Q4 versus -1.18% in Q3. December marks the lowest premium renewal rate change of the year at -2.92%, with October being the second lowest at -2.24%.
Across all lines of business, December was consistently one of the greatest premium renewal rate change months for the year. Over the past year, the IVANS Index has provided a new view into key movements of the industry on a monthly basis, firmly establishing a new authority for agents and insurers to manage their renewals and pricing models.
Matt Foran, VP and general manager of IVANS Market Appetite, a division of Applied Systems, is responsible for the creation and strategic execution of the cutting edge distribution platform built for the commercial insurance industry. Prior to his current role, Matt was the CEO of EvoSure, which was acquired by Applied Systems in September 2015. Before co-founding EvoSure, Matt was the director of strategy for Zurich Specialty Products, a $2.5 billion business unit of Zurich Insurance Group, where he worked closely with the CEO and Senior Management to set overall strategic direction, develop and execute financial and operational plans, and lead execution of strategic initiatives. Previously, Matt served as assistant vice president of Marsh USA, with responsibilities including the initial formation of the Marsh & McLennan Agency, the Marsh Select Model, the restructuring of Marsh USA, and was a broker for healthcare and Fortune 500 firms. Matt was selected as a Global Rising Star by Reactions Magazine in 2011 and named in Insurance Business America magazine’s Hot 100 list for 2015.