What describes the use of surplus lines in soft markets?

In soft markets, the insurance market is characterized by increased competition among insurers, leading to lower premiums and more coverage options for consumers. During these periods, standard market insurers often adjust to competitive pressures by offering more favorable terms and conditions. As a result, businesses and individuals are less likely to seek insurance through surplus lines, which are typically used when coverage is not available in the standard market.

Surplus lines are usually utilized when risks are deemed too unique or high for conventional insurers, or when coverage is not available for specific needs. In a soft market, the availability of broader coverage options in the standard market reduces the necessity to turn to surplus lines. Therefore, the use of surplus lines becomes less frequent in such market conditions, as more accessible and competitively priced coverage options are available from standard insurers.