What characterizes a "hard market" in motor insurance?

A "hard market" in motor insurance is characterized by rising rates that insurers implement primarily to generate profits and counteract losses. During a hard market, insurers often face increased claims costs or losses, compelling them to raise premiums to restore profitability and maintain financial stability. This behavior reflects a shift away from competitive pricing strategies towards a more conservative approach focused on risk management.

In contrast to this, a soft market features lower rates and increased competition, making insurance more affordable for consumers. In a hard market, discounts and low rates are less common, as insurers are more cautious about sharing risks and are instead focused on protecting their financial interests.