Everything you need to know about a ‘hard insurance market’

There have been lots of communications and many within the insurance industry believe we are in the early phases of a hard insurance market.

If you have never heard the term “hard market,” you may have experienced the effects of one as an insurance customer. We would like to make sure you understand what a hard market means for the insurance industry and, more importantly, what it could potentially mean for you.

What is a hard market?

A hard insurance market is when the insurance market as a whole face’s financial challenges. There are many reasons why a hard market evolves.

  • Claims and increased re-insurance costs– All insurers re-insure their books of business each year. If the claims costs increase, the re-insurers costs increase as the re-insurers are contributing more toward claims. Catastrophic losses, and events such as COVID have and will continue to lead to substantial increased costs.
  • Less competition- If the number of insurers in the market decrease, there is less competition.
  • Investment returns- Insurers have always been able to make investments in their accumulated cash reserves, it forms part of their rainy-day reserves. As interest rates are at their lowest, they have been for many years, there is little return on these investments.
  • Solvency margins- Over the last few years, the regulators have insisted that insurers increase their solvency margins, for the safety and security of their policyholders. This reduces their liquidity, which leads to less cash being available in the business to invest.

How can Exe Insurance help you in this ‘hard market’?

Here at Exe Insurance, we have knowledgeable and experienced brokers who understand what is going on within the industry and know how to make sure you get the best possible insurance cover at the most reasonable price, no matter what is going on in the market.

We can spot changes within the market and we have seen it coming for some time, as these times don’t just occur overnight, so we are always well prepared for these changes. Therefore, we always gather comprehensive risk information from our customers, so we are always selling our clients own risk management features to make our customers as attractive to the insurance industry as they can possibly be.

Whilst price is important to any customer, we prefer to arrange insurance cover based on matching cover with our clients’ needs, price proximate, and quality of insurer.

How can your business prepare for these changes?

There are many ways you can keep on top of these changes and keep your insurance premiums as low as possible.

For further advice, come and speak to the experts! Email us on info@exe-insurance.co.uk or call 01392 797 733.


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