Understanding the market cycle

What causes a market cycle and are we heading into a soft market in 2024?

Hard markets usually last around a maximum of three years and this latest one started in 2020.

This presentation, delivered by Alan Chandler one of the UK’s most popular presenters, looks at what causes market cycles in the insurance industry and what is likely to occur in 2024.

Alan correctly called the hard market in 2020, providing a presentation on the seven reasons why the market would harden. Rates have now got much higher; investment returns are now at very healthy levels and underwriting in the UK looks a lot better proposition than it did back in 2020. New entrants will be attracted to the market and existing players will look to expand capacity to take advantage of the current favourable investment conditions.

Rates will not crumble over night, but Alan predicts 2024 will see a change in demand and supply, where Insurers will have to start having to fight more for business, and there will need to be a change in the way insurers operate, which may result in home working underwriters actually answering the phone to brokers!

Alan will also explore how brokers and underwriters can be successful in a softening market. Brokers have a fiduciary duty, and this means insurers cannot ask brokers to be loyal without also providing genuine benefits at renewal for the policyholder.

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