Meaning of hard market | Babel Free

Definitions

An economic environment in which insurers raise their prices.

Examples

“Property-liability insurance markets have been characterized historically by “soft” markets, in which prices are stable or falling and coverage is readily available, followed by “hard” markets, in which prices rise rapidly and availability declines.”

“A possible explanation for this difference is that under the variations-from-bureau rates-without-prior-approval regime, the regulatory agency continues to hold rates down during a hard market but allows the insurer to increase rates relative to pure administered pricing during the soft phase of the cycle.”

“Insurers are reluctant to pay out retained earnings during soft markets because of the difficulty of raising capital again when the market enters the next hard market phase, leading to excess capcaity and downward pressure on prices.”

CEFR level