In the spirit of full transparency, we’re going to break down what’s happening in the insurance world right now. Buckle up, because it’s been crazy! Among other substantial changes, the two-tiered market has morphed into one. What does this mean exactly?
One Market, More Risks
If one thing’s thing is clear, the market has changed. The regular cadence of the insurance industry union is defined in the terms “soft” or “hard.” In the past, a soft marketplace has been semi-consistent, meaning that there is increased competition and inconsistent sellers and buyers.
After a soft market exists for some time, however, a hard one follows. Insurance Business Magazine states that, “a hard market is an upswing in a market cycle, when premiums increase and capacity for most types of insurance decreases.”
This might include:
- Falling investment returns for insurers
- Increased severity of loss
- Regular intervention
The soft market on the other hand, “resembles a bidding war, with everyone chiming in at the last minute to offer the cheapest deal on a risk.” A soft market is described as, “the soft market resembles a bidding war, with everyone chiming in at the last minute to offer the cheapest deal on a risk.”
How to Prepare
There is no way to fully understand what the future will look like, but professional predictions can pave the way for preparation (thank you, analytics!)
After all, it’s better to be proactive than reactive.
Some of the predictions made are as follows:
- “The property and casualty sector is the biggest insurance sector in the US
- Insurtech partnerships are on the rise
- There’s a huge coverage gap in life insurance for Millennials
- The days for a single business model for insurance are over
- Cyber rates are going to increase
- Workers comp will continue to increase
- General liabilities will increase”
Through all of these new changes, Benchmark is here to partner with you. We ask the “what if” questions BEFORE you experience an event that would require the answer. Contact us today!