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Hard market & shrinking capacity for risks

Hard Market Capacity & Reinsurance Strain

IndustryInsurance
Added Jun 23, 2026

The hard market has shrunk capacity across many lines, leaving brokers struggling to place risks and small/medium carriers struggling to grow without compromising underwriting.

Analysis:

Hard markets create opportunity for new capacity vehicles — AI-powered MGAs and program administrators that can profitably underwrite risks others avoid. But building an insurance capacity business is capital-intensive and cyclical. Venture investors need to understand the insurance cycle.

Thesis threads

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