Final answer:
During a 'hard' insurance market, insurance companies are more likely to increase premiums to recover losses and regain financial stability, making a) Increased premiums the most likely of the given options to occur in such a period.
Step-by-step explanation:
The concept being questioned pertains to the insurance market dynamics, specifically relating to what is known as a "hard" insurance market. During such a period, increased premiums are the most likely occurrence. This is because, in a hard market, insurance companies face higher underwriting losses due to factors such as increased claims or adverse economic conditions. In response to mitigate these losses, insurers will elevate their premiums to recover incurred losses and re-establish their financial stability. Furthermore, insurance firms might also become stricter in their underwriting criteria, limit the availability of certain coverages, and reduce their exposure to high-risk policyholders.
Let's translate this to the given options. Increased coverage limits are generally not characteristic of a hard market, as this would potentially increase the insurer's risk. Decreased or stable premiums would seem counterintuitive in a situation where the company needs to recoup losses. Therefore, the correct answer is a) Increased premiums.