Certified Professional in Health Care Risk Management (CPHRM) Practice Exam 2025 - Free CPHRM Practice Questions and Study Guide

The market condition characterized by rising premiums and strict underwriting is identified as a hard market. In this environment, insurers typically face increased claims costs and more significant financial losses, which leads them to raise premiums substantially to stabilize their operations and maintain profitability. As a result, they tend to tighten underwriting criteria, making it more challenging for certain risks to obtain coverage.

This situation often occurs following a period of high claims or catastrophic events, prompting insurers to reassess their risk exposure. In contrast, other market conditions have different characteristics; for example, a soft market is marked by lower premiums and more lenient underwriting criteria, while a stable market indicates minimal fluctuations in pricing and underwriting. A dynamic market suggests varying conditions but does not specifically align with the clear characteristics of rising premiums and strict underwriting, which are definitive hallmarks of a hard market.