Navigating the Hard Market - Playing Insurance Hunger Games

Are your Clients Playing Insurance Hunger Games? 

Although this sounds like a reality show or streaming saga, it is real life, defined as the "hard market." The bottom line is that everyone needs insurance, but not everyone can afford it. Some will scale back on coverage, while others will drop it altogether.

How do you recognize a hard market?

• Higher premiums
• Reduced coverage availability
• Tighter underwriting guidelines
• Fewer discounts and incentives
• Increased policy cancellations and the number of non-renewals 
• Carriers withdraw from markets or go out of business 
• More people are shopping around to replace their current coverage

Agents who are willing to adjust their thinking will survive in this market. They must think strategically, stay current on market conditions, and be prepared for future situations and economic environments. They should anticipate problems and solve them before they happen.

How did this become a hard market?

In the “perfect storm”, several bad things happen simultaneously to create an unavoidable outcome. The same is true of this hard market. It didn’t happen overnight, but it has been simmering on the stove for too long and is now boiling over.

What caused this hard market? Let’s consider insurance. It covers unexpected situations, and the past few years have been flooded with them—the perfect storm.

• More natural disaster payouts for weather-related hurricanes and wildfires
• Auto and property claims
• Higher settlements

• Home and auto repairs (materials and labor)
• Medical materials and professional medical services
• Litigation

• Premiums invested in stocks, bonds, and assets have been impacted
• Market volatility has impacted profits

• Fewer insurance policies written
• Carriers are being forced to leave certain markets

• Some mandated rate freezes have delayed insurers from adjusting rates promptly, causing steeper price increases.

• An increase in claims for life insurance, combined with stagnation in business operations and supply chain disruptions, generated higher payouts.

This hard market isn’t just challenging—it’s an insurance hurricane. But no storm lasts forever. Grab your umbrella, and let’s face the rain together. Let’s discuss how you can help your clients ride out this storm.

Communication is key. Your clients need guidance, not silence. They may complain and vent their frustrations, but it’s your job as their “insurance therapist” to listen and help them solve their problems. It’s the best form of customer service and client retention.

Yes, it will be challenging—maybe even draining. But when other agents are dodging calls and ghosting clients, that’s your cue to show up, answer the phone, and save the day. Agents who don’t step up will lose clients, which is a win for you.

Patience, empathy, and active listening skills are what set you apart from other agents. Keep showing up. Be there for your clients as their trusted insurance advisor. Learn more about your products so you’re equipped to navigate challenging situations and find solutions.

An example of navigating the hard market with your client.

Jack is a homeowner in a region with higher-than-average crime rates and is concerned about the risks. Due to the hard market, his rates increased by almost 30%. Plus, the insurance company raised his deductible for theft claims. 

He is frustrated, and the monthly impact on his household budget is real because his work schedule has been cut by 8 hours a week. He wants to maintain his current level of protection, if possible, as he’s trying to turn his woodworking hobby into a business and needs coverage for his tools.

This is where you step in and offer solutions!

1. Compare rates between multiple carriers, examining plans that offer discounts for home security systems, doorbell cameras, smoke alarms, or other smart home devices. 
2. Evaluate the deductible and compare prices with other carriers to see if a slightly higher deductible could reduce his monthly premiums.
3. Have Jack look at his more expensive tools as an additional rider, which may be more cost-effective than trying to increase overall coverage.
4. Review Jack’s policy to see if it is based on actual cash value (ACV) or replacement cost. He could use replacement cost coverage to ensure that his tools are replaced at their current market value, rather than being depreciated in value.
5. Look into bundling policies for discounts.
6. Check into discounts for being claims-free for a specified period.
7. Ensure Jack’s policy remains aligned with his needs. Even slight changes can make a big difference.

It’s not impossible to obtain a more manageable premium for Jack while still ensuring that he and his belongings are adequately protected. Providing this level of service is the best way to maintain your book of business. Keep showing up, and you won't only retain clients, but you’ll also gain new ones.

Want to continue this discussion?  Reach out to learn how to equip yourself with the tools and resources to thrive in this hard market.  Click Here.