US commercial P&C renewal rates retreat in Jan.; eyes on auto & BOP

US commercial P&C insurance renewal rate growth retreated in five of six major categories in January, including a major reversal for commercial auto, putting average rate growth below levels seen throughout the fourth quarter of 2023, the latest reading of the Ivans Index indicated.

A simple average of all six categories shows rate growth coming down by a half a point to 6.3% after the prior month’s consecutive multi-year high. Counting out the outlier of workers comp, average renewal rate growth fell 0.6 percentage points to 7.8%. 

Commercial auto renewal rate growth slipped nearly 1.3 percentage points, one of the strongest downward moves for any segment in recent years, to a 7.4% annual rate of growth. That's 1.8 percentage points below the November peak. 

General liability rates, where growth has been trailing all other major categories except workers compensation since September, suffered the next biggest downward monthly move, down 0.8 points to a 5.4% growth rate. General liability is the only commercial segment in the Ivans index with a growth rate below the prior 12M running average. 

Commercial property has had the fastest rate of growth nearly uninterrupted for years. Annual renewal rate growth of 10.3% is down from the December reading, but well within a range that has held over the past six months at or above the 10% mark.

Business owners' policies (BOP) are taking the second fastest pace of renewal rate growth and, despite a 0.4 point drop in January to a 9.3% annual growth rate, are just one month off of what had been a long-term high in rate momentum. Against 3M and 12M running averages, business owner policy renewal rates continue to have the greatest momentum following steep hardening in Q4 2023.  

Umbrella policies are arguably the most stable commercial segment, but a 0.4 point decline in January to a 6.4% annual rate of growth in renewal rates still leaves the segment moderately above a range that had been in place through Q3 of 2023.  

Renewal rates in workers compensation continue to fall versus prior year levels, although readings had turned volatile in the final months of 2023. For January, the average renewal rate change at negative 0.7% .

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