January 2024 Insurance Premium Renewal Rates Survey Insights
Market Update: January's Insurance Premium Renewal Rates Show Signs of Easing
The US commercial lines insurance market exhibited elevated premium renewal rates in January, with data from the Ivans Index providing a comprehensive view of trends across major insurance lines. Although renewal rates remained higher than previous years, a general slowdown in increases was observed, signaling a potential shift in market dynamics towards more stability.
Breakdown of Renewal Rates by Insurance Line
In January, various commercial insurance lines experienced notable changes in renewal rates compared to December. Commercial Auto saw a decrease in average renewal rate change to 5.62%, down from 6.46% the previous month. Business Owner's Policy (BOP) and General Liability averaged 6.89%, a drop from 7.58% and 7.52%, respectively. Meanwhile, Commercial Property rates eased to an average change of 7.22%, from 8.34% in December. Umbrella insurance rates, however, rose to 10.47% from 10.07%, bucking the easing trend. Workers' Compensation maintained a negative trend with rates dropping to -2.17% from -1.77%.
Even with this moderation, property and liability renewal rates remained notably above historical norms and were only slightly below peak levels recorded in recent years, suggesting a continued correction phase rather than a full return to a softer market.
Factors Influencing Current Trends
Industry analysis points to several contributing factors for these pricing trends. Reinsurance costs, increased losses due to catastrophic events, and inflation in the construction and repair sectors are key drivers of Commercial Property rates. For liability and Umbrella lines, social inflation, litigation funding, and significant jury verdicts, notably in sectors like trucking and construction, influence pricing dynamics. Conversely, favorable loss experiences and competitive forces have sustained downward pressure on Workers' Compensation rates.
Regional and sector-specific differences are also critical. Properties in catastrophe-prone areas, fleets reliant on auto coverage, and high-risk liability classes face heightened pricing pressures, whereas well-performing, lower-risk accounts are seeing more moderate rate increases.
Implications for Agents, Brokers, Carriers, and MGAs
For agents and brokers, clients continue to face premium pressures, particularly in Commercial Property, BOP, and General Liability. However, signs indicate that the hardest phase of the market is stabilizing. Yet, the persistent high rates in Umbrella insurance suggest insured parties are focusing on managing total risk costs, retention, and structuring future programs as they approach 2026 renewals.
Carriers and managing general agents (MGAs) navigate an environment that rewards precise underwriting discipline, as competitive pressures regain strength in various segments. The ongoing decreases in Workers' Compensation rates impact considerations around mixed-line profitability and strategic capital allocation.
Future Outlook
As the industry progresses, attention will turn to upcoming renewal periods to determine if the January slowdown signifies a lasting trend toward easing property and casualty rates or merely a short-lived consequence of competitive activity. Key uncertainties, such as future catastrophic events, reinsurance renewals, and prevailing macroeconomic conditions like inflation and interest rates, will crucially affect the duration and stability of the current pricing plateau.