credit crisis and the problems with mortgage-backed securities

Insurance brokers were very busy in the fall of 2008 since the troubles of AIG became public knowledge. Also, there were speculations that the property/casualty markets were becoming hard as a consequence of the credit crisis and the problems with mortgage-backed securities. What are hard-markets? Why would there be such speculations?

Explain in terms of the underwriting cycles and the breakeven combined ratio for each line of insurance.