A condition of the insurance marketplace in which insurance is difficult to obtain and relatively expensive. In a hard market underwriting is strict carriers are looking for the best risks. A hard market often appears after catastrophes or a period where the industy has had significant losses.
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REINSURANCE: In Reinsurance, a hard market is characterized by prudent underwriting and adequate pricing, whereas a soft market reflects sloppy underwriting and deficient pricing.
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US: In the insurance industry, the upswing in a market cycle, when premiums increase and capacity for most types of insurance decreases. Can be caused by a number of factors, including falling investment returns for insurers, increases in frequency or severity of losses, and regulatory intervention deemed to be against the interests of insurers.
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UK: Market in which the supply of (re)insurance is restricted in relation to the demand. Premiums increase and terms harden as (re) insurers try to become profitable.
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When the availability of some or all classes of insurance or reinsurances is limited relative to demand for such insurance or reinsurance resulting in increased premiums and coverage restrictions.