A “Hard” Insurance Market in 2024 (2024)

FAQs

Are we in a hard or soft insurance market in 2024? ›

While the hard market may continue through 2024, experts predict it will soften in 2025. Reinsurance may also increase by the end of the year, leading to softer market conditions in 2025.

The personal lines property insurance market is in a multi-year hard market which is characterized by higher premiums, stricter underwriting standards, and reduced capacity. The factors that drive a hard market are many with a significant driver being reinsurance.

The current hard market is expected to persist for several years, with pricing and conditions unlikely to soften soon. The industry continues to navigate the challenges posed by increased catastrophe activity and changing financial conditions.

Looking ahead, new products, with more flexible features, and stronger digital experiences are necessary to enable the business model transformations many insurers want to enact. Stronger ecosystem business models will also become the primary platform for customer engagement in the future.

Analysts project 11.5% earnings growth and 5.5% revenue growth for S&P 500 companies in 2024. Fortunately, analysts see positive earnings and revenue growth for all eleven market sectors this year.

We are currently in a hard market cycle which spiked during 2018-2021, seeing double digit rate increases year over year, but is now beginning to level off.

A hard insurance market is a period marked by rising rates and coverage becoming more difficult to obtain, in contrast to a soft market, where conditions are favorable to stable or falling prices and plenty of coverage options.

On the other hand, a hard market, sometimes called a seller's market, is characterized by increased premium costs for insureds, stricter underwriting criteria, less capacity, restricted terms of coverage and less competition among insurance carriers for new business.

We've been in a hard market since about 2019. But now, the latest Council of Insurance Agents and Brokers (CIAB) insurance market report, covering the second quarter of the year, has found signs of softening.

This atypical hard market is driven by a 'quadruple threat' that features persistent economic and social inflation causing unexpectedly high losses, increased weather-related claims, scarce and costly reinsurance, and low interest rates over the past many years affecting investment income, which is crucial for P&C ...

When was the last soft insurance market? ›

Global commercial property and casualty (P&C) lines have delivered strong financial performance in recent years following the soft market of 2013 to 2018, despite widespread disruption in the wake of the COVID-19 pandemic, the war in Ukraine, and the resulting supply chain disruptions.

The property/casualty (P/C) insurance industry cycle is characterized by periods of soft market conditions, in which premium rates are stable or falling and insurance is readily available, and by periods of hard market conditions, where rates rise, coverage may be more difficult to find and insurers' profits increase.

The Current Turnover Rate

Historically, turnover rates in the insurance industry have increased from 8-9% to 12-15% recently, indicating that retaining employees is becoming more difficult​ (Deloitte United States)​.

Today's insurers are exposed to multiple risks, from financial risks, such as shifting interest rates, changing costs and sources of capital, and increasing claims levels due to consecutive years of significant inflation, to an array of nonfinancial risks, including extreme climate events and generative AI (gen AI).

Experts predict a 1% to 10% increase in general liability insurance premiums in 2024. Fortunately, you're not in this alone. We're here to help you understand the current insurance market and implement risk management strategies to protect your organization.

Looking a little closer at the different parts of the global P&C insurance market, it is primarily property that is driving the hard market. Over the last 12 months, US property rates, driven by high catastrophe losses, have seen another sustained period of hardening not seen in the other major geographies.

The property/casualty (P/C) insurance industry cycle is characterized by periods of soft market conditions, in which premium rates are stable or falling and insurance is readily available, and by periods of hard market conditions, where rates rise, coverage may be more difficult to find and insurers' profits increase.