One reason observers may be a little hesitant about conclusively calling a hardening market today is due to incorrect predictions of a market turn in 2008, when the financial crisis hit.
“Some industry spokesmen jumped the gun toward the end of 2008 and declared that the soft-market conditions had come to an end. What actually happened, though, was the opposite,” insurance-broker Willis noted in a Dec. 8 report that focused primarily on the energy-insurance sector.
Willis said new capital entered the market in ’08 and the financial crisis reduced buyer demand, prolonging the soft market. Now, the Eurozone crisis and the still-challenged U.S. economy present similar challenges to market-hardening.