Agents don’t like a hard insurance market…at least not good ones. While premiums drop in a soft market, capacity increases which allows for growth. When the market gets a bit harder premiums increase and thus so do commissions. When we get to a true hard market, non-renewals begin and you’re unable to easily re-market your book. Not a good position.
Ugh! I’ve been through 3 hard markets in my time and I can’t say I enjoy them. Having to remarket your entire book, sell outrageous increases for sub-standard coverage absolutely sucks.
It is simple: Too many agents going after finite number of accounts. To lure a customer, too many will promised to “save you money”. In otherwords, they write checks and then expect their companies to cash them.
Companies are stupid as well because they go along with it because the emphasis is on top line growth.
Never ending viscious cycle. Business will flock to the lowest rate until such time as that market exits or raises the rate.
The lack of hard markets owes more to the general downtrend in interest rates from the early 1980’s until the present. The firming market of recent years has happened because interest rates have been about as low as they can go for several years now.
When interest rates start to increase (whenever that is), insurers will have to unload many of their bond investments at a loss, which should result in a fairly hard market.
How do you tell your family and friends that you a hoping for a $50B catastrophe anywhere in the world where no one gets hurt! I love the hard market. Do I work harder, yes. But, it gets the amateurs out of the market and I make a lot more money. To my educated clients, just get the best terms available. Those that are not as sophisticated, I do have a lot of educating to do. It’s well worth it!
Agents don’t like a hard insurance market…at least not good ones. While premiums drop in a soft market, capacity increases which allows for growth. When the market gets a bit harder premiums increase and thus so do commissions. When we get to a true hard market, non-renewals begin and you’re unable to easily re-market your book. Not a good position.
What utter garbage this is.
Ugh! I’ve been through 3 hard markets in my time and I can’t say I enjoy them. Having to remarket your entire book, sell outrageous increases for sub-standard coverage absolutely sucks.
It is simple: Too many agents going after finite number of accounts. To lure a customer, too many will promised to “save you money”. In otherwords, they write checks and then expect their companies to cash them.
Companies are stupid as well because they go along with it because the emphasis is on top line growth.
Never ending viscious cycle. Business will flock to the lowest rate until such time as that market exits or raises the rate.
The lack of hard markets owes more to the general downtrend in interest rates from the early 1980’s until the present. The firming market of recent years has happened because interest rates have been about as low as they can go for several years now.
When interest rates start to increase (whenever that is), insurers will have to unload many of their bond investments at a loss, which should result in a fairly hard market.
When insterest rates increase, the market will soften not harden.
What, no “that’s what she said” comments?
These comments contradict the poll embedded in the article:
As to the market cycle, do you prefer:
Something in Between 60% (69 votes)
Hard Market 37.39% (43 votes)
Soft Market 2.61% (3 votes)
How do you tell your family and friends that you a hoping for a $50B catastrophe anywhere in the world where no one gets hurt! I love the hard market. Do I work harder, yes. But, it gets the amateurs out of the market and I make a lot more money. To my educated clients, just get the best terms available. Those that are not as sophisticated, I do have a lot of educating to do. It’s well worth it!