IVANS Index released its April figures. Commercial lines rates continue to move upward. That is except for workers’ compensation. It still sits in the negative where it has been housed for over a year.
The rates are down a bit the month of April compared to the month of March, however things are looking good. The two lines that topped the month before are commercial auto and umbrella.
Last month, major commercial lines insurance renewal premiums continued their upward trend except for workers’ compensation, which remains in negative territory for the year, according to the latest IVANS Index.
Here’s how things look:
• Commercial Auto: The 4.54% jump is up from 3.87% at the end of April and is the highest renewal rate change.
• BOP: The 3.86% is down from a 4.29% in April.
• General Liability: a 2.16% increase is down from 2.24% at the end of April.
• Commercial Property: The 2.98% jump is down from 3.04% the month before.
• Umbrella: It’s up 2.31% which is down from 2.13% at the end of April.
• Workers’ Compensation: Fell 2.93% and that’s down from -2.79% the month before.
IVANS Markets Vice President Brian Wood said the figures show a “hardening insurance market as insurance premiums rise and insurers are evaluating which lines of business to actively compete in.”
Information released last week by Loretta Worters of the Insurance Information Institute (I.I.I.) says personal lines is growing faster than commercial lines. A strong economy is the reason.
This isn’t new. Worters’ report notes when it comes to direct written premiums, it has been the case since 2014. She quotes former I.I.I. head Dr. Robert Hartwig — who is now Clinical Associate Professor of Finance, Risk Management & Insurance at the Darla Moore School of Business, University of South Carolina — who said the combined ratio for P&C insurance lines topped 104.1 in 2017 compared to the 103.5 for personal lines.
“Property & casualty profitability is influenced both by cyclicality and volatility,” he said, “Demand for insurance should increase in 2018-2019 as GDP growth continues at a steady and perhaps accelerated pace and gradually benefits from the economy broadly.”
Hartwig also noted that the personal lines insurers are price disciplined.
Source links: Business Insurance, Insurance Journal, PropertyCasualty360.com