US commercial P&C renewal rates slip in March; Q1 at long-term high

US commercial P&C insurance renewal rate growth edged down from prior month peaks in the industry's three hottest commercial lines, and came down for five of six charted lines overall, the latest reading of the Ivans Index indicated.

The nation’s hottest three lines - commercial property, commercial auto and business owners’ policies - all retraced the prior month gains that had left them at long-term highs. Umbrella and general liability followed, each at or near their own longer-term high. 

A simple average of all six commercial lines shows the annual rate growth slowing by half a percentage point from the February reading to 6.8%, tied with December 2023 as the second highest reading in the current cycle. Counting out the outlier of workers’ comp, average renewal rate growth slipped by 0.4 points to 8.4%. 

For the larger first quarter, the six-line average of 6.8% rate growth was up a fractional 0.2 points from Q4. The adjusted measure excluding workers’ comp also rose 0.2 points to 8.3%. Both readings are highs for the current pricing cycle. 

Commercial property renewal rate growth gave back just over half of the prior month's gain to slip to 10.5%, still the fourth highest reading in the current cycle that has played with double digit growth for a year. Quarterly average readings have risen unabated throughout the cycle. 

Commercial auto, volatile over the past six months or more, enjoys the second highest annual renewal rate growth in March at 9.6%, even after a 0.7 percentage point decline from the February long-term peak. The Q1 average rate of rate growth at 9.1% is nonetheless up for a consecutive quarter.

Annual renewal rate growth for business owners’ policies came down by a rather notable 0.9 points in March to 8.8%, the lowest reading since October. The Q1 average rate growth reading of 9.3% is nonetheless up on Q4. 

US general liability remains the least volatile amongst major lines tracked, down a notch in March to 6.1% but still within 2.3 points of the mid-term low. The Q1 average advanced by less than a tenth of a point from Q4 and is up less than 7 tenths of a point from the prior year quarter. 

Renewal rates for umbrella policies showed the only rise from the prior month. Annual rate growth of 7.1% was a fractional gain from February, but rendered the fifth mid-term high in six months and cemented a 0.4 percentage point in the Q1 average annual renewal rate gain to 6.8%. 

Workers’ compensation rates continue to languish without visible traction for renewal rates. Annual rate growth in March fell to a negative 1.6%, a low dating back to January 2023, but still within the mid-term range. 

Ivans releases its commercial insurance pricing index of premium rate renewal changes on a monthly basis. The Ivans Index measures the premium difference year over year for a single consistent policy based on data of more than 38,000 agencies and 600 insurers and MGAs.

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