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Applied Releases Commercial Lines Premium Rate Index Findings for Year-End and Q4 2021

February 25, 2022

Across Canada, average premium renewal rate change remained flat year over year across all major commercial lines

Mississauga, ON – February 25, 2022 – Applied Systems® today announced the fourth quarter and year-end 2021 results of the Applied Commercial Index™, the Canadian insurance industry’s premium rate index. Year over year, the magnitude of rate change in Q4 was flat across all lines relative to average premium renewals, remaining at 9.23% as it was in Q4 2020. Notably, Hospitality and Retail Services experienced their highest rate change in Q4 2021. In 2021, results indicate that across all lines of business, average premium renewals experienced the highest rate change in Q4 at 9.23% and the lowest in Q1 at 7.68%.

Quarter over quarter, Q4 2021 results demonstrated average renewal rate change increases across the most commonly placed Commercial Lines categories, including Business and Professional Services, Construction, Hospitality Services and Retail Services. Average premium renewal rate change decreased quarter over quarter for Real Estate. Average Real Estate Property premium renewal rate change remained high in Q4 2021 at 10.22% relative to other industries. Average Hospitality and Retail Services premium renewal rate change experienced yearly highs at 9.09% and 9.14%, respectively.

Significant findings for 2021 include:

Real Estate Property

  • Premium renewal rate change average was 10.22% for the quarter for Real Estate Property, its lowest average of 2021 and down from the Q3 2021 average of 10.49%.
  • Real Estate reached its highest rate change average in Q2 2021 at 10.62%.

Business and Professional Services

  • For Business and Professional Services, Q4 2021 premium renewal rate change average was 8.16%, up from the Q3 2021 average of 7.91%.
  • In 2021, Business and Professional Services reached its highest rate change average in Q2 at 8.57% and its lowest in Q1 at 6.59%.

Construction, Erection and Installation Services

  • Premium renewal rate change average for Construction, Erection and Installation Services was 9.88% for the quarter, up from the Q3 2021 average of 9.81%.
  • Q2 2021 was the highest rate change average for Construction with 10.27% and Q1 was its lowest with 8.76%.

Hospitality Services

  • Hospital Services’ Q4 2021 premium renewal rate change average was 9.09%, its highest for the year and up from the Q3 2021 average of 7.23%.
  • In 2021, Q1 was the lowest rate change average for Hospitality Services with 6.21%.

Retail Services

  • Premium renewal rate change for Retail Services averaged 9.14%, its highest for the year and up relative to the Q3 2021 average of 8.78%.
  • Q1 2021 was the lowest rate change average for Retail Services with 7.12%.


“Year over year, results indicated that premium renewal rates remained consistent across all lines of business. However, we are seeing an increase in premium renewal rates across most lines of business quarter over quarter,” said Steve Whitelaw, senior vice president and general manager, Applied Systems Canada. “We will continue to watch these trends and report on changes so brokers and insurers have data to use in policy and renewal conversations.

Access the complete quarterly report here.

 

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Applied Commercial Index is a trademark of Applied Systems, Inc. All data is fully anonymized when aggregating and analyzing the Applied Commercial Index.

 

About Applied Systems
Applied Systems is the leading global provider of cloud-based software that powers the business of insurance. Recognized as a pioneer in insurance automation and the innovation leader, Applied is the world’s largest provider of agency and brokerage management systems, serving customers throughout the United States, Canada, the Republic of Ireland, and the United Kingdom. By automating the insurance lifecycle, Applied’s people and products enable millions of people around the world to safeguard and protect what matters most.

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