[T030]

tight market
In the property and liability insurance business, underwriting philosophies fluctuate between periods called the tight or hard market and the soft market. The tight or hard market is the period when underwriting standards are very tight and the rates are high. Normally the hard market closely follows a soft market period where the underwriting standards had been soft and the price or rates are very low, resulting in substantial underwriting losses. The cycle swings back and forth between soft underwriting with low rates and heavy losses, to the hard market with subsequent tightening of standards and dramatic increases in price.