Hi, In chapter 6, it mentioned about verticalisation in the insurance market , different insurers have different terms , and the lead underwriter have better then follower , the differences are greater during the soft market. i understand the terms will be different between lead and follow underwriter , eg lead tend to do more work (in pricing , T&C , claim handling) , however can anyone explain to me why the differences are greater during the soft market? as in the soft market , it will be relatively competitive with low premium and less strict T&C , i would thought the differences will be less in the soft market. thank you
Hi I don't know as a fact but based on the dynamics of a soft market where there is excess capacity leading to lower premium rates it may be because of the extra competition between the increased number of following underwriters. The issues that cause a soft market are likely to affect the follow market more than the lead market because its easier to become a follow underwriter than a lead underwriter.
