Commercial rate increases starting to uptick in 2022
August 23, 2022 by Alyssa DiSabatino
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Commercial lines premium renewal rate increases are slowing down compared to last year, but since the beginning of 2022, renewal rates are starting to uptick again, according to recent findings by Applied Systems.
On average, rates across all commercial lines increased by 8.95% in 2022 Q2, compared to a 9.12% average increase in 2021 Q2. All lines of business, except retail and business and professional services, saw rate decreases compared to the same quarter last year, according to Applied Commercial Index for 2022 Q2.
Quarter-over-quarter, though, average premium renewal rates in 2022 Q2 are up across all lines of business.
“While premium renewal rates are lower than this time last year, we are seeing a steady increase in rates since the start of the year,” Steve Whitelaw, senior vice president and general manager of Applied Systems in Canada, comments in a press release. “Our index supports the anecdotal evidence that we are indeed in a hard market. As we make our way into the second half of 2022, our quarterly index will show if the market continues this trend.”
Real estate property policyholders saw an 8.81% average rate increase in 2022 Q2, up from an average increase of 8.75% in the first quarter. Year over year, the 2022 Q2 average premium renewal rate change in real estate property was down from last year’s average rate increase of 10.62%
Business and professional services saw a premium renewal rate increase of 8.72% this quarter, up from 7.96% in from 2022 Q1.
The average premium rate increase for construction, erection and installation services was 9.8% for this quarter, up from the 2022 Q1 average of 9.32%. The 2022 Q2 average premium renewal rate increase was down compared to last year’s second-quarter rate increase of 10.27%.
In hospitality services, the average premium renewal increase this quarter was 8.82%, up from the 2022 Q1 average of 8.02%, but down compared to the same period last year (8.99%).
Feature image by iStock.com/CHUNYIP WONG