Posted in Marketing and Strategy Terms, Total Reads: 457
Definition: Hard Market
This is a type of market where the demand of the product is higher than the supply of the product. The increased demand & supply constraint gives the seller a chance to dictate prices so as to maximize its revenue. This can be understood through the phase of property & casualty insurance cycle which is characterized by high demand & low supply.
When the demand of insurance is higher than the supply of insurance, the result is hard market. This type of market will have higher insurance premiums. This kind of hard market is also known as seller’s market as the power lies in the hand of the seller.
The companies take full advantage of hard period & charge premium to maximize their revenue. The buyers lose their bargaining power during a hard market.