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Commercial lines trends: 2018:Q1

Commercial property

  • The chart shows: The green line shows the percentage change in fixed investment (structures, equipment, software). The blue line shows growth in commercial property direct premiums written.
  • The back story: Property premiums tend to rise as fixed investment does.
  • The takeaway: Businesses continue to invest, so property exposures are likely to keep rising.

Business investments predict commercial property premium growth

% change from same quarter, prior year

*Commercial property direct premiums written (fire, allied lines, CMP, inland marine, burglary and theft); business fixed investment (structures, equipment, and software).

Note: Recession indicated by gray shaded column. Data are seasonally adjusted annual rates.

Sources: https://fred.stlouisfed.org/series/PNFI#0; National Bureau of Economic Research (recession dates); Insurance Information Institute.

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Workers compensation

  • The chart shows: The number of manufacturing jobs is in blue; construction jobs in orange; mining jobs in green.
  • The back story: Workers comp premiums tend to rise as these injury-prone professions increase hiring.
  • The takeaway: Employment is rising, and might pass pre-recession levels by the end of 2018.

As hiring goes, exposures follow

000 at quarter-end

Sources: U.S. Bureau of Labor Statistics; Insurance Information Institute.

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Injury claims

  • The chart shows: The year-over-year change for hospital care from a year earlier.
  • The back story: Claim severity for injuries tends to follow hospital inflation.
  • The takeaway: Price changes are lower than they were for the past 20 years, but still higher than general inflation.

Price changes* for hospital care affect claims for many lines of business

 

*Percentage change from same month in prior year; through February 2018; seasonally adjusted.

Sources: US Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institute.

View Archived Graphs