ALIRT Research – Three Weddings (and a Funeral?)

It is commonly held that the present six-year hard market pricing cycle has been a boon for U.S. commercial lines insurers. And this is certainly true, generally. But we must not forget that hard market conditions also generally arise after periods of extended soft pricing behavior and that the latter can result in substantial financial deterioration. It is, in fact, this financial deterioration that ultimately impairs insurers’ balance sheets and drives the “fear” phase of the rate cycle and hence higher rates and tighter terms and conditions.