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What happens when you raise your insurance rates, maybe even by double-digits, but you don't see any boost to your top- or bottom lines? That's what you call an “invisible hard market”–a very clever phrase coined last week in an insightful but disturbing state of the markiet speech delivered by Brian Duperreault, president and CEO of Marsh & McLennan Companies.


You see, the problem, according to Mr. Duperreault, is that while property-casualty insurers are finally poised to shrug off the soft market and start raising prices again–spurred on by rising reinsurance costs and their own investment losses–since the economy is contracting, carriers are not likely to see any positive impact.

With firms either closing facilities, laying off workers or closing up altogether, there is less insurable exposure out there, so while the price of coverage may be going up, the actual premium written may end up flat or even down this year. That means insurers could end up treading water financially.

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