With everyone looking ahead to what seems to be an inevitable hardening of the market later this year or in 2010, it's a good time for agents and brokers to take stock of their customers, markets and appetite for risks. In other words, are your customers ready for the hard market? Have you established sound relationships with your most important markets? And are you ready to write new or unfamiliar risks that could help you expand your book of business?

First, consider that your customers may not understand insurance market cycles, especially the unique conditions we see today. Clearly, underwriting and investment losses have cut capacity, but the dramatic price run-ups across all lines that are typical of a hard market could be masked by the recession and the resulting decrease in demand for new policies. So unless catastrophic events trigger sudden market changes, we may very well see a more gradual hardening than we have seen in recent cycles.

You need to educate your customers in a soft market, explaining how market cycles work and how they should plan for them. If your customers have been saving money in the soft market, I encourage you to tell them to put some of those savings away because you'll be back to ask for it when the market hardens and rates increase.