October 2, 2024
An informal broker survey on market availability today
Higher premiums. Stricter underwriting standards. Reduced coverage options. These are all characteristics of a hard insurance market. Hard markets aren’t unique to our industry—it’s a cycle. At some points in time, markets soften. At others, like in recent years, they harden. This seems especially true in unregulated lines of business like Commercial Lines.
During a hard market, market availability becomes an issue. The restrictive environment becomes expensive for consumers, assuming they can find coverage at all. But crucial to the work brokers do is having access to markets to place their customers’ business.
Similar to a Stop Light Party where guests wear buttons to indicate their relationship status—green for single and looking, red for in a relationship, and yellow for in between—we’ve identified markets based on their reported availability.
Ready to Mingle
There seemed to be consensus within our informal poll that there’s movement in the Hospitality industry.
“Hospitality is softening, specifically risks with a higher percentage of alcohol revenue,” said one respondent. “There are more players in the market now. We’re not seeing that equate to lower premiums, but at least there are options.”
Other industries mentioned were Liability and Manufacturing.
“Availability is improving in many classes, which is great. MGAs are responsible for much of this. It will be interesting to see what happens with MGA regulation and if that has any effect on the situation.”
Already Spoken For
A number of sectors appear to be staying put.
“Trucking and transportation continue to be a challenge,” said one respondent.
A number of brokers also identified Cyber as posing a particular challenge, as well as Directors & Officers coverage.
“When the market hardened, what used to be standard markets are now sub-standard markets, which makes it harder to place coverage. For these sectors, this means that their insurance is now more expensive.”
Open to Possibilities
Realty was singled out as an area with elements going in either direction.
“Some classes of residential realty like apartment buildings are improving. But it’s more players, not necessarily lower premiums. Other than apartment buildings, residential realty continues to be a challenge.”
With the diversity of markets, it’s difficult to draw out a single narrative—especially from our very limited survey sample. Some markets are remaining inflexibly hard, while others are improving, though there’s notable improvement on the recent past, where all markets were hardening. This seems to indicate a broad trend of things starting to go in the right direction, but probably not as quickly as we’d all like. For now, we’re left trying to interpret the current market’s mixed signals.