Insurance Premium CAGR Calculator: Annualized Premium Growth
Work out the annualized growth rate of insurance premiums between two years — the figure that exposes how much faster insurance grows than general inflation in stressed insurance markets.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Annual premium growth | Total premium growth |
|---|---|---|
| $1.5k to $2.5k over 5yr (homeowners) | 10.76% | 66.67% |
| $2k to $3.5k over 6yr (auto) | 9.78% | 75.00% |
| $6k to $9k over 5yr (health family plan) | 8.45% | 50.00% |
| $800 to $1.1k over 4yr (renters) | 8.29% | 37.50% |
How This Calculator Works
Enter the starting and ending annual premium (same coverage on both sides) and the years between them. The calculator finds the compound annual growth rate that connects the two figures.
The Formula
Compound Annual Growth Rate
Start is the beginning value, End is the ending value, n is the number of years
Worked Example
Homeowners insurance rising from $1,500 to $2,500 over 5 years is a 10.8% annual growth rate, total 67%. That's 3x to 4x general inflation — common in catastrophe-exposed states (Florida, California, Louisiana, Colorado) where carrier losses have driven sharp rate cases. Auto and health insurance show similar patterns in different markets.
Key Insight
Insurance premium CAGR varies sharply by line and region. Homeowners in catastrophe-exposed states has seen 10% to 20% annual growth post-2020. Auto insurance industry-wide ran 8% to 15% in 2023-2024 due to repair-cost inflation. Health insurance has historically averaged 5% to 8%. The common thread: insurance premiums tend to outpace general inflation because loss costs (claims paid) outpace it — and rate cases catch up over time.
Frequently Asked Questions
How is insurance premium CAGR calculated?
(Ending premium / starting premium) ^ (1/years) − 1. From $1,500 to $2,500 over 5 years is about 10.8% per year.
How fast do insurance premiums typically grow?
Long-run averages: 5% to 10% per year across most lines. Sharp acceleration in catastrophe-exposed regions (Florida, California, Louisiana, Colorado wildfire areas) where rates have grown 15% to 30% annually in recent years. Health insurance steadier around 5% to 8%.
Why do premiums grow faster than inflation?
Loss costs (medical bills, vehicle repair, home rebuild cost) inflate faster than general CPI. Insurance pricing reflects expected loss costs plus expense load — when loss costs accelerate, premiums catch up after a lag through rate cases.
Can I lower the growth rate?
At individual policy level: raise deductibles, drop or limit coverage, shop carriers annually, bundle policies, improve credit score (in states where it affects insurance). Market-level rate trends are largely outside any individual customer's control.
Should I project at this rate forward?
Use recent CAGR for short-horizon budgeting (1 to 3 years), but expect mean reversion over longer periods — current double-digit homeowners growth in cat-exposed states won't continue indefinitely. Use long-run line-and-region averages (5% to 10%) for 5+ year projections.
Related Calculators
Methodology & Review
The growth rate is the compound annual rate between annual insurance premium at the start and end of the period. Use the same coverage on both sides (auto, home, health, life) for a meaningful trend. Premium growth varies materially across insurance lines and regions.
Written by Ugo Candido · Last updated May 17, 2026.