During a soft market, which of the following is true?

In a soft market, insurance conditions are generally characterized by lower premiums, increased competition, and greater flexibility in policy terms. During this period, employers or buyers have more leverage when negotiating premiums because insurers are keen to attract clients and maintain their market share. This leads to opportunities for businesses to negotiate more favorable terms, including lower prices or enhanced coverage.

In contrast, a hard market would typically see higher rates and less flexibility, as demand exceeds supply, leading to stricter underwriting practices. Policies may also be more conservative and have shorter durations during such periods. Understanding these cyclical trends is vital for navigating insurance markets effectively, especially in the context of premium negotiations and underwriting rules.