DEFINITION of 'Invisible Hard Market'

A property/casualty insurance market phenomenon in which the market is hardening (seeing reduced supply and higher prices) but the normally positive effects of a hard market are not visible to insurers. Under ordinary circumstances, a hard market is considered a good thing for insurers because it increases underwriting income. In the invisible hard market, insurers are not seeing this increase and thus not seeing a better bottom line.

BREAKING DOWN 'Invisible Hard Market'

For the invisible hard market to become visible, MMC President and CEO Brian Duperreault, who coined the term, said that either the economy would need to strengthen (which would increase exposure), insurance companies' investment income would need to stabilize, or a major insurable event would need to occur. He recommended that insurers behave as if the market was still soft by strongly controlling claims and expenses.

RELATED TERMS
  1. Insurance Industry ETF

    A sector-following fund that invests primarily in insurance companies, ...
  2. Underwriting Income

    Profit generated by an insurer's underwriting activity over a ...
  3. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  4. Assigned Risk

    A risk that an insurance company is required to provide coverage ...
  5. Cooperation Clause

    An insurance contract clause that requires the policyholder to ...
  6. Adjusted Underwriting Profit

    The profit that an insurance company generates after paying out ...
Related Articles
  1. Insurance

    Exploring Advanced Insurance Contract Fundamentals

    Understanding your contract can help you protect our family's financial security.
  2. Insurance

    What Happens If Your Insurance Company Goes Bankrupt?

    When insurance companies go bankrupt or face financial difficulty, it's bad news for policy holders.
  3. Insurance

    Bundle Your Insurance For Big Savings

    Bundling your insurance can save you money and time. Read on to see how get the most out of multiline insurance discounts.
  4. Insurance

    Understanding Your Insurance Contract

    Learn how to read one of the most important documents you own.
  5. Insurance

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  6. Insurance

    Explaining Insurance

    Insurance is a form of contract between an individual and an insurance company that spreads risk in exchange for premium payments.
  7. Insurance

    How Much Life Insurance Should You Carry?

    Learn how much - if any - insurance you really need.
  8. Financial Advisor

    Is Life Insurance From Your Employer Enough?

    Covering the needs of the ones you would leave behind is not easy. But efforts to secure a life insurance policy outside of work should pay off.
  9. Insurance

    How to Protect Your Income No Matter What

    What does it mean to insure your income? Here are a variety of ways to do it and some insights into when it might make sense to invest in income insurance.
  10. Financial Advisor

    Buying a Life Insurance Policy? Read This First

    Knowing who needs life insurance, how it works and the different types of insurance can help consumers make informed decisions about this product.
RELATED FAQS
  1. What is the long-term outlook of the insurance sector?

    Learn about the long-term outlook of the insurance sector, including different challenges for property-casualty insurers ... Read Answer >>
  2. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  3. What is the difference between underwriting and investment income for an insurance ...

    Learn more about insurance companies' investment and underwriting incomes. Read about how investment incomes and underwriting ... Read Answer >>
  4. Can your insurance company cancel your policy without notice?

    Learn about your rights as an insured when it comes to your insurance policy being canceled, including how to access your ... Read Answer >>
  5. What are examples of the largest companies in the insurance sector?

    Read about some of the largest and most influential companies in the insurance sector, a list that includes Berkshire Hathaway ... Read Answer >>
Hot Definitions
  1. Trumponomics

    Trumponomics is a term for the economic policies of President Donald Trump.
  2. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  3. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  4. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  5. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center