The terms "buyers’ market" and "sellers’ market" are commonly used in real estate, but they also apply to the auto insurance industry. In this context, the phrases "soft market" and "hard market" are used. Roberts Family Insurance explains how each market affects the industry and your insurance policy.
What Is a Soft Market?
A soft market in the auto insurance industry is similar to a buyer’s market in the real estate industry. Customers in Friendswood, TX hold the power, leading to increased competition among carriers to attract their attention. To do so, insurance companies offer reasonable premiums, fewer underwriting criteria, and generous coverage options. The goal is to expand their business by attracting more customers. However, the downside is that intense competition can lead to lost revenue or even business closures.
What Is a Hard Market?
A hard market typically follows a soft market to balance the industry. It is equivalent to a seller’s market in the real estate industry. In a challenging market, auto insurance companies hold significant power due to the limited number of competitors in Friendswood, TX. This results in higher premiums, fewer coverage options, and stricter underwriting criteria for customers. Insurance companies may issue non-renewal notices, discontinue underperforming insurance types, and exit high-risk locations.
What Market Is the Auto Industry in Right Now?
As of this writing, the auto insurance industry is entering a soft market. After exiting high-risk and unprofitable markets, insurance companies are now focused on generating revenue and attracting frustrated customers with competitive offerings. They aim to appeal to the 38% of people dissatisfied with their current policies and the 51% of high-value customers who are unlikely to renew.
With buyers holding more power during this time, it’s an excellent opportunity to purchase auto insurance or switch providers. An agent at Roberts Family Insurance can review your policy, address your concerns, and connect you with carriers that meet your needs. Contact us today for more information on auto insurance.
