Invisible Hard Market

AAA

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.

INVESTOPEDIA EXPLAINS '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. Reinsurance

    The practice of insurers transferring portions of risk portfolios ...
  2. Bottom Line

    Refers to a company's net earnings, net income or earnings per ...
  3. Insurance

    A contract (policy) in which an individual or entity receives ...
  4. Casualty Insurance

    A broad category of coverage against loss of property, damage ...
  5. Underwriter

    A company or other entity that administers the public issuance ...
  6. Insurance Underwriter

    A financial professional that evaluates the risks of insuring ...
Related Articles
  1. Home & Auto

    The History Of Insurance

  2. Home & Auto

    How An Insurance Company Determines ...

  3. Home & Auto

    The History Of Insurance In America

  4. Insurance

    Is Insurance Underwriting Right For ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center