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The hard and soft market cycle remains one of the insurance industry's most powerful yet least understood forces. In this eye-opening conversation with industry veteran Chris Burand, we peel back the curtain on what's really happening within carrier boardrooms during the current market hardening.
Most insurance professionals under 40 have never experienced a genuine hard market until now. With remarkable clarity, Burand explains how we're potentially facing "the hardest market since the mid-80s" despite carriers posting record profits last year. This seeming contradiction points to the fundamental truth that hard markets stem from balance sheet weaknesses, not income statement problems.
The roots of our current crisis trace back to 2018 when carriers made a fateful decision to reduce reinsurance purchases, effectively doubling their growth rate while increasing catastrophic exposure. When devastating Midwest storms struck and investment losses mounted, the industry's surplus position deteriorated dramatically. What's particularly troubling is Burand's revelation that some major carriers have borrowed significant portions of their surplus or invested heavily in junk bonds, creating serious quality concerns beyond mere quantity issues.
For claims professionals, these market dynamics directly impact daily operations through staffing reductions, heightened scrutiny of settlements, and increased pressure to control costs. Understanding the "why" behind these changes provides valuable context for navigating today's challenging environment.
We also explore how third-party litigation funding, excessive verdicts, and problematic risk assessment models are creating scenarios where certain risks simply can't be priced at any level. These structural challenges suggest the current hard market may persist much longer than historical patterns would indicate.
Whether you're an insurance adjuster trying to understand why your job just got harder, a broker explaining premium increases to clients, or simply someone curious about the forces shaping the insurance landscape, this conversation provides essential insights into the trillion-dollar tightrope the industry is currently walking.
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For more insights, you might consider a career in liability adjusting or if you're searching for reliable adjusting services, visit Auten Claims Management.
To explore more about Chantal Roberts and her contributions to the industry, visit CMR Consulting.
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