Rates up 2% in the latest CLIPS survey.
Q3 increases were bigger than Q2 increases in standard lines (property, GL, comp), suggesting the trend is accelerating. Professional liability rates remain soft, especially in D&O.
What’s your definition of a “hard market?” I’d say the market may be a little less soft than it was a year ago (although, even then, are the rate increases really outrunning the loss trends?), but given how far we’ve dropped, this hardly seems like a hard market. A 2% rate increase isn’t enough to declare victory yet, especially given where interest rates are.
When **present value** loss ratios get back to their 2006 (or so) levels, I think we can start calling it a hard market.
What a great question! The term is imprecise.
I consider a hard market one in which rates are rising, full stop. I think that’s how many in the industry, and the trade press think of it.
Here’s a different definition:
Hard market – high rates, low limits, restricted coverage (http://www.irmi.com/online/insurance-glossary/terms/h/hard-market.aspx) I haven’t heard of the latter two in the market recently.
I think considering the interest rate environment and present value loss ratios are important in measuring future profitability. I just don’t think of them in terms of defining the hard market, though obviously others can.
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