Is the insurance market turning soft again, and what should insurers do about it?

For years, the Nordic and global insurance industry has enjoyed the rare tailwind of a hard market. But as the song goes, the times, they are changing.

After 20 consecutive quarters of rising premiums, global brokers are now reporting negative renewal pricing trends across multiple lines, also in Continental Europe. In the Nordics, leading intermediaries are reporting increased competition not only on their large commercial customers, but also on facilities.

Facilities (or “binders”, “schemes”, “pools”) are tranches of insurance customers placed by the broker with a single insurer – typically clients within specific industries (such as SME commercial clients) or lines of business (such as auto or workers’ compensation). Pricing on facilities is also trending downwards in the Nordics, and new insurers are showing interest in facility participation, the large brokers are telling me. Interestingly, and somewhat worryingly for some insurers, the facilities comprising smaller bundled risks suggest that a market segment which, in previous soft markets, would have been among the last to be affected or only mildly so, is now front and centre in the potential reduction of premium rate levels. Nordic MGA activity is also picking up, LinkedIn announcements of new Nordic MGAs opening shop was seen recently, and capital is, slowly but surely, flowing back into the market.

The mechanics are well known: Soft markets emerge when the cost of capital falls, insurers are making profits, and new capital enters the system faster than it is absorbed by losses. Premium rates are reduced, and underwriting appetite increases. In some markets, this is already visible. Based on my recent conversations with brokers, Nordic corporate lines are already showing clear signs of a market shift. The January 2026 renewals may mark the beginning of a new cycle.

No one can answer that with certainty. But the question must be asked – because once the direction becomes clear, the consequences, both short-term and long-term, will be too important to ignore.

Growth without real transformation

Let us begin the analysis with a sober look at how most Nordic insurers have generated growth over the past three to four years. It has not come from product innovation, new customer segments, or improved distribution economics. As is typical in a hard market, growth has largely been driven by premium hikes. As it should be! In a hardening market, it makes perfect sense to go all in – writing well-priced risks and improving portfolio risk ratios. Missing the rising tide would be very wrong.

The flip side, however, is the question of how to grow in a mature insurance market with little – if any – underlying systemic growth, if/when the market pricing start reducing The Nordics fall squarely into that category. Yes, some attempts have been made to introduce new products like cyber insurance, sustainability-linked offerings, and prevention-focused add-ons. But customers, both retail and commercial customers, have largely ignored them or refused to pay extra.

Internally, cost-out programs in the Nordics have mostly been tactical, driven by “haircut” trimming across departments. Few organisations have undertaken truly transformative programs to reset and substantially digitise their operating models, as we see in many mature international markets where competition has been more intense and sustained over a longer period.

In the meantime, continued market transparency and lower switching costs – especially in personal lines and small commercial – are slowly shifting the power balance toward the buyer. Add to that the insurers’ pressure to grow, and the result is historic levels of churn across the Nordic insurance market. Portfolio stickiness, once taken for granted, is eroding. And the prospect of (new) competitors leveraging cheap capital to reduce premium levels will add negatively to that challenge.

Strategic moves for a softer market

If the softening happens and continues insurers will be forced to rethink their game plans. Three moves stand out:

In a short-term perspective, the first is to double down on business performance management. If premiums fall or competition intensifies, knowing exactly where you make and lose money becomes even more critical. This includes identifying and managing loss-making portfolios, gaining a clear view of distribution economics (across direct, broker, bancassurance, MGAs, and other partners), improving cost-to-serve insights across personal and commercial lines, and linking commercial decisions to profitability data at a much more granular level. Where is there potential to reduce, and by how much? Most Nordic insurers still have room for improvement in this area. In what could become a prolonged soft market, effective capacity and capital management will be essential.

The second move is operating model transformation. The key question is how much more “tactical” OPEX savings Nordic insurers can extract without undermining core business capabilities, and whether incremental extensions now need to give way to more transformational shifts. Economies of scale have long been a strategic theme in Nordic insurance, but soft markets tend to punish inefficient scale and reward those who can adjust costs quickly and intelligently. Many Nordic insurers may be large in size, but that alone does not guarantee true scale advantages – even though most large players are now actively pursuing them. In a soft market, size only matters if you know how to use it. Real scale requires modularity, automation, specialization, shared platforms, and aligned technology stacks. Without those elements, being bigger simply means being slower and more exposed.

Importantly, not all insurers will be affected equally. The impact of a softening market depends heavily on the business mix, particularly the balance between commercial and retail exposure. Commercial portfolios are typically the first to feel pricing pressure when the market turns, while retail lines often react more slowly, or in some cases, not at all. Insurers must therefore ask themselves: Do we have a truly scalable and flexible core? Can we adjust costs in real time as premium volumes shift? Do we have the digital maturity to automate, orchestrate, and personalize at scale, and the portfolio structure to navigate market changes with resilience?

The third move is product and service innovation. Embedded insurance, bundles focused on segments willing and able to pay for a differentiated proposition, value-adding service layers, health insurances, and hyper-segmented solutions for specific life events – the ideas are already out there. What has been missing is scale and execution. Too often, innovation has amounted to side projects or pilots with limited reach and no clear business ownership. In many cases, it has been treated as optional. But in a soft market, insurers must rediscover the urgency of innovation as a commercial necessity. In this context, insurers must also acknowledge that some innovations will inevitably compete with or even replace parts of their existing business. That is not something to avoid. It is a deliberate strategy to stay ahead by evolving from within.