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      Question

      How does a "hard market" typically begin?

      A When insurers experience significant investment losses. Correct Answer Incorrect Answer
      B When the demand for insurance exceeds the available supply. Correct Answer Incorrect Answer
      C When insurers experience a series of large and unexpected losses Correct Answer Incorrect Answer
      D When government regulations restrict insurance pricing Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      The correct answer is C. When insurers experience a series of large and unexpected losses. Hard markets often begin with a series of catastrophic events or a significant increase in claims, leading to higher losses for insurers.

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