Hard Market

[scott]

The insurance press continues with reports of the "coming hard market." A year ago I predicted a turn. So far, it has not, as far as I can see.

Insurers are aggressive in competing on new and renewal busienss. The economy has reduced, on some level, demand for insurance. Agency consolidation means that producers are being pressured to produce more new business.

Carriers seem to be expanding their marketing territories to attract premium dollars. More insurers chasing existing risks.

Alternative risk transfer systems (risk retention groups, self insured groups, captives) have added capacity to the marketplace. An increase in the "supply" of insurance.

All of these factors have contributed (I think) to the continuing soft market. When will it end? Will it end?

When it does end, how will insurance buyers react? Will they pare back their coverage - eliminating bells and whistles? Will small companies take more substantial deductibles ($10,000 plus). Will the captive and alternative marketplace have more of a place in the mainstream?