What is a ‘hard’ insurance market? And are we in one?

A "hard" insurance market, which we are presently in, refers to a situation in the insurance industry where insurance companies face challenges and conditions that make it more difficult for them to underwrite policies. During a hard market, insurers typically experience higher costs, increased losses, and reduced profitability. As a result, insurers become more selective in the risks they are willing to cover, leading to stricter underwriting criteria and higher premiums.

Several factors can contribute to a hard insurance market, most significantly is a rise in the number or severity of insurance claims which can put financial pressure on insurance companies, leading to a hard market.

During a hard insurance market, policyholders may find it more challenging to obtain coverage, and premiums are likely to increase. This can affect businesses and individuals alike, as they may need to reassess their insurance needs and explore alternative risk management strategies.