What is happening with commercial premium rates in Canada?
What is happening with commercial premium rates in Canada? | Insurance Business Canada
Insurance News
What is happening with commercial premium rates in Canada?
Year-end figures are released
Insurance News
By
Mika Pangilinan
Applied Systems has released the year-end and Q4 2022 results of its commercial premium rate index, revealing that the average premium renewal rate change decreased across all major commercial lines in Canada year-over-year.
According to the Applied Commercial Index, the magnitude of rate change decreased across all lines relative to average premium renewals in the same quarter of the previous year, with Q4 2022 seeing an 8.58% change compared to 9.23% in Q4 2021.
In addition, the Q4 2022 results reported average renewal rate change decreases across construction, hospitality services, and retail services, while indicating increases in both business and professional services and real estate.
“Year over year, results indicated that premium renewal rates decreased across all lines of business,” said Steve Whitelaw, senior vice president and general manager at Applied Systems Canada. “However, we are seeing an increase in premium renewal rates across several lines of business quarter-over-quarter. With ongoing macroeconomic uncertainty, we expect to see average premium renewal changes reflected in the index which serves as a leading indicator for brokers as they navigate renewals.”
Rate changes across business lines
In 2022, business and professional services reached its highest rate change average in Q2 at 8.72% and its lowest in Q1 at 7.96%, according to the report.
Meanwhile, construction, erection, and installation services saw a premium renewal rate change average of 9.06% for the quarter, falling from the Q3 2022 average of 9.85% to a yearly low.
Hospitality services also experienced a decrease in the average premium renewal rate change in Q4 2022 at 9.08%, down from the Q3 2022 average of 10.40%. Its highest rate change average was in Q3 at 10.40% and its lowest was in Q1 at 8.02%.
Meanwhile, real estate saw an increase in premium renewal rate change average in Q4 2022, at 8.23% compared to Q3 2022’s average of 7.76%. Q2 was the highest rate change average for real estate at 8.81%, while Q3 was its lowest with 7.76%.
Finally, retail services experienced a decrease in the average premium renewal rate change at 9.19%, down from Q3 2022’s average of 9.53%, which was the highest average rate change of the year. Its lowest rate change average was recorded in Q1 2022 at 8.59%.
Applied released the Q3 2022 results of its Commercial Index last November, reporting that all major lines of business posted rate increases relative to Q3 2021 figures, apart from real estate services.
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