For many insurance professionals, the hard market is the only market they have ever experienced. Rising premiums, shrinking capacity, and increasingly restrictive underwriting have shaped the industry for much of the past decade.
Now, as conditions soften across most commercial and personal lines, brokers and agents face a different test. Success will depend less on navigating scarcity and more on making strategic decisions about carrier relationships, coverage quality and client advice, according to two industry leaders who spoke to Insurance Business.
“I've worked through both hard and soft markets, but someone who's only been in the business for the past five years may only have experienced a hard market,” said Jay Wolfberg (pictured on the right), president of We Insure, a fast-growing national insurance franchise that operates as a hybrid independent agency.
“The agents who will thrive are the ones who embrace the softer market, build strong carrier relationships, secure the best pricing and coverage, and work effectively with underwriters.”
Wolfberg distinctly remembers entering the business during one of the softest markets in recent memory. "Honestly, it was like fishing with dynamite,” he said candidly. “It almost wasn't fair. A retiree might come in paying $1,700 a year to insure a condo, and I'd find them coverage for $600.”
But that environment changed dramatically as insurers failed and capacity tightened. In Florida, where Wolfberg operates, several long-established carriers folded altogether.
The experience also exposed a weakness in his own business. Concentrating too much business with a single insurer is one mistake that younger brokers should avoid repeating. "You don't need one policy with 130 different carriers, but you also shouldn't have 130 policies with just one carrier," Wolfberg said.
A softer market makes diversification easier because more insurers are competing for the same risks. Where a single carrier may once have been willing to insure a new-construction home, several carriers are now quoting comparable business at prices within only a few percentage points of one another. This gives brokers more choice, but it also shifts the focus from finding capacity to evaluating long-term carrier stability.
At the same time, agents and brokers shouldn’t assume every aspect of the hard market will unwind alongside pricing. Commission reductions, restrictive policy wording and tighter claims practices often remain in place long after premiums begin to fall.
"It's much harder to unwind commission reductions and policy changes than it is to implement them,” Wolfberg said.
Rather than treating insurance as a commodity, brokers should carefully evaluate policy language and understand exactly what protection clients are purchasing, he added.
Doug Turk (pictured on the left), president of specialty at independent brokerage Relation Insurance, believes a softer market opens brokers up to compete on expertise instead of price. Helping clients improve coverage through portfolio reviews, stronger contract wording and careful analysis of evolving exposures, particularly in property, cyber and financial lines are the biggest opportunities in this cycle, he said.
Turk compared the role to medical specialists. "Most people are content to see their general practitioner," he said, "but when something serious happens, they want the cardiologist or orthopedic specialist. Insurance is no different."
As risks become increasingly complex, clients are looking for specialist knowledge rather than simply someone to place coverage. “That’s really where specialty shines,” said Turk. “It's about deeply understanding the client's business and translating that into meaningful insurance and risk management solutions.
“The challenge is finding the right balance. You're helping clients achieve their strategic objectives, not simply completing an insurance transaction. That's probably our biggest opportunity, but it can also be our biggest challenge.”
While most sectors are showing signs of easing, casualty insurance continues to move in the opposite direction. Auto liability, in particular, remains under significant pressure as nuclear verdicts and escalating jury awards drive higher loss expectations.
“Many casualty programs were originally priced around assumptions that losses might reach $15 million. Today, we're seeing losses reaching $25 million because of nuclear verdicts and large jury awards,” Turk said. “When that happens, pricing resets fairly quickly. For now, casualty remains the area to watch most closely, although I expect the market will eventually adjust.”
Outside casualty, however, Turk expects conditions to remain relatively stable, supported by abundant capital and strong competition, even in catastrophe-exposed property markets.
“I live in Los Angeles, and despite the billions of dollars in wildfire losses, the overall market hasn't changed dramatically because there's still so much capital looking for opportunities,” he said. “That creates opportunities for clients to improve their insurance programs, increase limits and strengthen coverage.”
For both executives, today's market rewards judgment over timing. As pricing becomes less of a differentiator, agents and brokers have an opportunity to improve carrier relationships, improve coverage outcomes and reinforce their value as trusted advisers.
