The Underwriting Cycle

The document discusses the underwriting cycle in the insurance industry. It explains that underwriting involves deciding which policies to accept or reject based on profitability. The cycle toggles between hard and soft markets. In hard markets, rates and availability of coverage are reduced due to factors like catastrophes. Soft markets have lower prices and looser underwriting standards due to increased competition. The profitability of policies and competition between insurers are major factors that drive the cyclical nature of the underwriting process.