Define Insurance cycle

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Accepted Answer

Insurance cycle refers to the pattern of hard and soft market conditions in the insurance industry.

Insurance cycle consists of alternating periods of hard market (high premiums, low capacity) and soft market (low premiums, high capacity).
Factors such as catastrophic events, investment returns, and regulatory changes can influence the insurance cycle.
During a hard market, insurers raise premiums and tighten underwriting standards to improve profitability.
Conversely, in a soft market, insurers lower premiums and relax underwriting standards to attract more business.
The insurance cycle is cyclical and can have significant impacts on insurance companies, policyholders, and the overall economy.

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