Applied Releases Commercial Lines Premium Rate Index Findings for Q1 2021
April 29, 2021
Average premium rates decreased across all major commercial lines
Mississauga, ON – April 29, 2021 – Applied Systems® today announced the first quarter 2021 results of the Applied Commercial Index™, the Canadian insurance industry’s premium rate index. Overall, the magnitude of rate increases is down across all lines relative to average premium renewals in the same quarter last year with 7.68% in Q1 2021 down from 9.02% in Q1 2020. Quarter over quarter, Q1 2021 results showed smaller increases on renewals across the most commonly placed commercial lines categories, including Real Estate Property; Business & Professional Services; Construction; Hospitality Services; and Retail Services.
Significant findings include:
Real Estate Property
Consistent with 2020 trends, Average Real Estate Property premium renewal rate change remained high in Q1 at 10.26% relative to other industries.
- In Q1 2021, the average premium renewal rate change is down as compared to 11.42% in Q4 2020.
- Year over year, the Q1 2021 average premium renewal rate change is down more than a point and a half from 11.90%.
Business and Professional Services
Premium renewal rate changes for Business and Professional Services averaged 6.59% in Q1 2021.
- Quarter over quarter, average premium renewal rate change is down as compared to 7.60% in Q4 2020.
- The Q1 2021 average premium renewal rate change is lower than the same quarter last year (8.28%).
Construction, Erection and Installation Services
Renewal rate changes for Construction, Erection & Installation Services averaged 8.76% in Q1 2021.
- Quarter over quarter, average renewal premium is down as compared to 9.11% in Q4 2020.
- The Q1 2021 average premium renewal rate change is up slightly as compared to the same quarter last year (8.48%).
Hospitality Services
Premium renewal rate changes for Hospitality Services averaged 6.21% in Q1 2021, continuing its 2020 trend of renewing at a lower rate relative to other industries.
- Quarter over quarter, the average premium renewal rate change is at its lowest point since Q1 2019 when it was 5.44%.
- The Q1 2021 average premium renewal rate change is down more than four and half points as compared to the same quarter last year (10.79%).
Retail Services
Renewal rate changes for Retail Services averaged 7.12% in Q1 2021.
- Quarter over quarter, the average premium renewal rate change decreased from 9.55% in Q4 2020.
- The Q1 2021 average premium renewal rate change is down more than a point and half from the same quarter last year (8.65%).
“Our data indicates that while the magnitude of the premium increases are down across the most commonly placed classes of commercial lines business in Canada, compared to 2020, premium increases remain a reality for businesses today,” said Steve Whitelaw, vice president of Industry & Partner Relations, Applied Systems. “The effects of the pandemic and the economic uncertainty continue to challenge small business, influencing renewal rates and risk advice, and we will continue to look to the Index as a light post for how industry is responding to macroeconomic changes.”
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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.