Applied report reveals spike in commercial premium rates in Q3 2022

Applied report reveals spike in commercial premium rates in Q3 2022 | Insurance Business Canada

Applied report reveals spike in commercial premium rates in Q3 2022

Applied Systems has published the results of its Applied Commercial Index and found that premium rates saw an overall increase of 8.46% in the third quarter of 2022, posting growth that was below the 8.76% rate hike seen during the same period last year.

According to the index, which analyses premium renewal rate trends within Canada’s most commonly placed commercial lines, all lines of business posted rate increases relative to Q3 2021 figures, with the exception of real estate services.

On a quarterly basis, average renewal rate change was more spread out, decreasing across business and professional services and real estate property, while increasing in construction, hospitality services, and retail services.

The Q3 premium renewal rate changes averaged across different commercial lines are as follows:

  • Business and Professional Services: 8.07% from 8.72% in Q2 2022
  • Construction, Erection, and Installation Services: 9.85% from 9.80% in Q2 2022
  • Hospitality Services: 10.40% from 8.82% in Q2 2022
  • Real Estate Property: 7.76% from 8.81% in Q2 2022
  • Retail Services: 9.53% from 9.51% in Q2 2022

“We are seeing premium increases across almost all lines of business, which is a consistent trend through this year,” said Steve Whitelaw, senior vice president and general manager, Canada, Applied Systems. “We continue to see resilience in the industry and as we move into the end of the year and look into 2023, this data will continue to inform insurer pricing decisions and broker advice during renewal conversations.”

The Applied Commercial Index pulls from almost 22,000 data transactions per quarter, according to Applied Systems, with premium renewal rate change measuring the year-over-year premium difference for various commercial lines of business.