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Applied Releases Commercial Lines Premium Rate Index Findings for Q4 2020

February 09, 2021

Average premium rates increased across all major commercial lines

Mississauga, ON – February 9, 2021 – Applied Systems® today announced the fourth quarter 2020 results of the Applied Commercial Index™, the Canadian insurance industry’s premium rate index. Overall, rates continue to remain hard across all lines relative to average premium renewals in the same quarter last year with 9.23% in Q4 2020 up from 8.79% in Q4 2019. Quarter over quarter, average premium renewal rates increased across all major commercial lines categories, including Real Estate Property; Business and Professional Services; Construction, Erection and Installation Services; Hospitality Services; and Retail Services.

Significant findings include:

Real Estate Property
As it has for much of 2020, average Real Estate Property premium renewal rate change of 11.42% remained high in Q4 relative to other lines of business.

  • In Q4 2020, the average premium renewal rate change is up as compared to 10.84% in Q3 but still down relative to the Q1 2020 high at 11.90%.
  • Year over year, the Q4 2020 average premium renewal rate change is up three-quarters of a point from 10.68%.

 
Business and Professional Services
Renewal rate changes for Business and Professional Services averaged 7.60% in Q4 2020.

  • Quarter over quarter, the average premium renewal rate change is up as compared to 7.11% in Q3, although still lower than Q1 2020, which averaged 8.28%.
  • The Q4 2020 average premium renewal rate change is slightly higher than the same quarter last year (7.37%).

Construction, Erection and Installation Services
Renewal rate changes for Construction, Erection & Installation Services averaged 9.11% in Q4 2020.
  • Quarter over quarter, average renewal premium reached its highest level during the year, up from 8.20% in Q3, 7.85% in Q2 and 8.48% in Q1 2020.
  • The Q4 2020 average premium renewal rate change is up slightly as compared to the same quarter last year (8.79%).

Hospitality Services
Premium renewal rate changes for Hospitality Services averaged 9.02% in Q4 2020.
  • Quarter over quarter, the average premium renewal rate change is up after dipping to 7.09% in Q3 and 6.31% in Q2, but down from its Q1 high of 10.79%.
  • The Q4 2020 average premium renewal rate change is down one and a half points as compared to the same quarter last year (10.52%).

Retail Services
Renewal rate changes for Retail Services averaged 9.55% in Q4 2020.
  • Quarter over quarter, the average premium renewal rate change increased as compared to 8.90% in Q3, 7.87% in Q2 and 8.65% in Q1.
  • The Q4 2020 average premium renewal rate change is down slightly from the same quarter last year (9.75%).


“Our data indicates that the market continued to harden at the end of 2020 compared to 2019 across all classes of commercial lines included in this Index,” said Steve Whitelaw, vice president of Industry & Partner Relations, Applied Systems. “As we continue to watch the effects of the pandemic and the economic uncertainty, the index will continue to provide data-backed guidance based on thousands of transactions being exchanged across the industry every day. This index provides insurers a data-backed reference point to help them determine competitive rates and deliver guidance on expected premium rates during renewals and as one factor when evaluating adequate pricing of new policies.”

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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