Category: Capacity and rating · Reviewed by Tim Roche, Director · PI & Commercial · Last reviewed 2026-06-05
A hardening market is the transitional phase between a soft market and a fully hard market. Rates begin to rise, capacity begins to tighten, terms begin to narrow — but the conditions of a fully hard market have not yet been reached.
Category: Capacity and rating Also known as: market hardening Related concepts: hard market, softening market, reinsurance cycle
Hardening markets are characterised by:
The hardening phase typically precedes the fully hard market by 12–24 months. Early identification of hardening conditions allows buyers to lock in favourable terms before the cycle peaks.
No specific regulation applies to hardening conditions per se. PRA reserve adequacy supervision and FCA conduct supervision continue throughout the cycle.
Hardening is observable in: published market rate indices (e.g. Marsh, Aon, Willis); broker placement reports; reinsurance broker renewal commentary; published Lloyd’s market performance reports; and the discussion at industry events (Monte Carlo, Baden-Baden). Early-warning indicators include: combined ratios rising above 100 per cent; ratings agency commentary on capital adequacy; and reinsurers raising rates at the January renewal.
For Apex clients hardening markets warrant earlier-than-usual renewal engagement, broader carrier panels and review of risk management to support best-in-class outcomes.
An illustrative example: the UK commercial property market began hardening in early 2019 following sustained attritional losses and prior-year reserve adjustments. Initial rate rises were 5–10 per cent; by 2020 the market had fully hardened to 20–40 per cent rate rises in many segments; conditions began softening from late 2023.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-05. Next review: 2026-12-05.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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