Premium rate changes in commercial lines in Canada have experienced a slight downturn quarter-over-quarter, indicating that the commercial hard market may be easing up a bit.
“While we are still experiencing a hard market, the Q3 index shows a slight reduction of average premium rate increases across most of the major commercial lines, except retail services which experienced a small increase,” said Steve Whitelaw, vice president and general manager for Canada with tech vendor Applied Systems, in a press release Thursday.
He was referring to the Q3 2021 results of the latest Applied Commercial Index. The index analyzes nearly 22,000 data transactions per quarter to summarize current conditions and trends within some of the most commonly placed commercial lines business in the Canadian market.
Quarter-over-quarter, Q3 2021 results showed “relatively lower” rate renewal rate changes across the most commonly placed commercial lines categories, including real estate property, business and professional services, construction and hospitality services. Retail services was the exception: Q3 2021 premium renewal rate change averaged 8.78%, up from the Q2 2021 average of 8.30%.
For the other commercial lines:
Real estate property: Premium renewal rate change average was 10.49% for the most recent quarter, down from the Q2 2021 average of 10.62%
Business and professional services: Q3 2021 premium renewal rate change average was 7.91%, down from the Q2 2021 average of 8.57%
Construction, erection and installation services: Premium renewal rate change average was 9.81% for the quarter, down from the average of 10.27% in the second quarter of 2021
Hospitality services: Q3 2021 premium renewal rate change average was 7.23%, down from the Q2 2021 average of 8.99%
Although the quarter-over-quarter commercial renewal rate dropped for most lines, year-over-year saw a slight increase. The overall rate increase for was up across all lines relative to average premium renewals last year, with an average of 8.76% in Q3 2021, up from 8.31% in Q3 2020. Real estate and retail services saw rate movement of 10.49% and 8.78% versus 10.84% and 8.90%, respectively, in Q3 2020.