Soft market conditions across multiple commercial lines have a way of changing the internal conversation at insurers. When pricing eases and competitors chase market share, the debate can shift from “what risk do we want?” to “what volume do we need?" An excessive focus on growth is becoming an urgent concern for some underwriters.
In an interview with Insurance Business, one experienced underwriter, speaking anonymously, put the issue starkly: “This pressure to grow the top line in a soft market – is that a prudent strategy?"
The question goes to the heart of a cycle that most seasoned insurance professionals know well. When premiums compress, retention becomes more difficult and renewal negotiations become more aggressive, growth targets can start to feel less like an aspiration and more like a directive - one that filters down into day-to-day underwriting decisions.
For this underwriter, the discomfort is amplified by the sense that the industry repeats familiar mistakes. “We see these cycles but do we ever learn from them?” he asked.
He described the risk as more than a temporary margin squeeze. In his view, decisions made under soft-market pressure can build weaknesses into a portfolio that only become obvious later - after losses emerge, claims inflation takes hold, or the market turns and yesterday’s assumptions are tested by harsher conditions. That’s when files get reopened, underwriting rationales are revisited and the quality of prior-year decisions is judged with the benefit of hindsight. The underwriter’s shorthand for the downstream effect was blunt: “poor underwriting”.
Some experienced underwriters are growing increasingly concerned about the pressure coming from CEOs and executives to continue to grow business in the soft market.
The underwriter said the pressure is coming not only from external competition but from inside companies as well, where management teams are pushing to expand despite the pricing environment. He said company leaders are demanding 12% to 15% growth at a time when many buyers have leverage and brokers have options.
In practical terms, he suggested that this kind of growth expectation can translate into underwriters being pushed to meet targets, defend renewal retention, and stay “competitive” on quotes - sometimes in ways that strain technical discipline. “When you’re beholden to the market, this is what happens.”
One warning sign, he said, is the significant differences in quotes for similar risks - something that can be hard to explain purely through the usual variables. “The variance in pricing is just mind boggling," he said.
He has seen massive differences in GL premium offerings to the same business. One offering was between $60,000 and $70,000. A competing bid came in at $15,000
To be clear, price variation can occur for legitimate reasons - differences in limits and deductibles, claims experience interpretation, attachment points, wordings, sub-limits, industry appetite, or even how insurers model or weight particular hazards. But the underwriter’s point was that the scale of the gap is what should make experienced practitioners pause, because it can indicate fundamentally different views of exposure - or a willingness by some players to win business at almost any cost.
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He linked that phenomenon directly to internal performance pressure. “You get his when you put underwriting staff under pressure to hit targets.”
The quote may read jarring on the page, but the meaning in context was clear: target-driven cultures can distort underwriting behaviour, particularly when speed, retention and top-line growth are treated as the primary measures of success.
The underwriter also pointed to capacity dynamics that can intensify competitive behaviour, especially when multiple markets are hungry for premium. In his telling, the soft market isn’t just a local story; it is shaped by the broader availability of capital and the strategies of large, well-resourced participants that can compete aggressively.
He flagged the role of Lloyd’s firms backing the Australian market, suggesting that the extra capacity can add to competitive intensity and help drive the kind of pricing volatility underwriters are now seeing.
For insurance professionals, when capacity is abundant and pricing pressure is widespread, underwriting governance becomes more important - not less. Referral thresholds, authority settings, pricing tools and portfolio steering all matter, but so does organisational willingness to walk away from business that doesn’t make sense technically, even if it helps a spreadsheet.
Ultimately, the underwriter’s comments return to a familiar industry dilemma: whether pushing for premium growth during a soft market is building sustainable books or laying the groundwork for painful correction later.
