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Viewpoint: Get Ready Now for the Soft Market (Because It’s Coming)
While discussing soft market underwriting may seem ill-timed given current strong results and hard market conditions, there are worrying signs that underwriters are beginning to chase market share in certain specialty classes.
Executive Summary
Tony Buckle and John Carolin, co-founders of the boutique insurance consultancy UWX, analyze underwriter motivation during the soft phase of the market cycle. While average market prices are the hardest seen in years, some price softening has begun to occur. Buckle and Carolin argue that perhaps now is the time to understand underwriting behavior during soft market phases. In the second article of this two-part series, Buckle and Carolin will discuss performance management across the cycle.Executive Summary Tony Buckle and John Carolin, co-founders of the boutique insurance consultancy UWX, analyze underwriter motivation during the soft phase of the market cycle. While average market prices are the hardest seen in years, some price softening has begun to occur. Buckle and Carolin argue that perhaps now is the time to understand underwriting behavior during soft market phases. In the second article of this two-part series, Buckle and Carolin will discuss performance management across the cycle.
Consider this recent observation from Patrick Tiernan, chief of markets at Lloyd’s of London, about the D&O line of business: “I think we are all running out of adjectives to describe the moronic underwriting approach being adopted by some elements of the market.” (Q3 Market Message – Lloyd’s (lloyds.com) at 4.49 minutes)
