Sometimes writers and consultants are too long winded. They take a roundabout way to avoid bitter reality. But for those who prefer brevity, I'll get to the point: This market sucks. It is the worst insurance market since 1933. Commercial net premiums written today are less than what they were 5 years ago. We also have the most significant exposure decreases since the Great Depression. We have severe deflation in the commercial insurance market. Some agencies are working very hard and yet their growth is zero percent. Zero percent growth in some parts of the country is great.

I am seeing agency owners and employees more scared than ever before. I get the impression some employees have been charged by their executives to find growth or else. These companies absolutely must find a way to grow and they must do it now. This desperate need for growth is likely exacerbating the soft market.

Making the situation more dire is the fact that quite a few insurance carriers are the walking dead. My analysis of a number of carriers suggests many are in trouble because they lack the capital to grow, and they lack the ability to generate sufficient profits to build capital internally. This combination is going to put these carriers in a financial vice grip when the market finally turns hard. Based on my research, many carriers do not have the ability to grow responsibly on a sustained basis under these soft market circumstances or possibly even maintain their current revenue base. I am not suggesting they will become insolvent, although that is a possibility. The more likely scenario is that some carriers will not have the surplus to support the significant premium growth that usually accompanies a hard market.