During which part of the insurance cycle might premiums be at their lowest?

Premiums are often at their lowest during a phase in the insurance cycle characterized by a surplus of insurance capacity in the market. A surplus occurs when insurers have more funds available to provide coverage than there is demand for that coverage. This abundance leads to increased competition among insurers, which generally drives down the prices of premiums as companies strive to attract more customers.

During this period, insurers may be more willing to reduce rates and offer more favorable terms in order to fill their capacity and maintain market share. This competitive environment allows consumers to benefit from lower costs for insurance products. In contrast, scenarios like high claims, increasing fraud rates, or significant regulatory changes typically create pressure on premiums, leading to increases rather than decreases.