Which term refers to the insurance pricing cycle?

The term that refers to the insurance pricing cycle is the underwriting cycle. This cycle captures the fluctuations in the insurance market regarding pricing and availability of coverage, which can be influenced by a variety of factors such as loss experiences, economic conditions, and competitive pressures.

In the underwriting cycle, insurers may experience periods of hard and soft markets. During a hard market, insurance prices rise, and underwriting becomes more stringent. This typically occurs when there are high levels of claims or losses, prompting insurers to increase premiums and limit coverage. Conversely, during a soft market, there is greater competition among insurers, leading to lower premiums and more lenient underwriting criteria.

Understanding the underwriting cycle is crucial for insurance professionals as it impacts not only pricing strategies but also the overall availability of insurance products. This aspect of the insurance business is vital for effectively managing risk and ensuring that companies remain solvent while providing competitive offerings in the marketplace.