56% of respondents expect a hardening of insurance rates over the coming year. 92% expect insurance capacity to remain stable or increase during the year ahead. 59% of CEOs expect their profitability to increase over the next 12 months.

However, the oft-cited concerns about the global economy had a majority of CEOs expecting equity markets to fall and fixed-income markets to remain stable in an environment of rising inflation.

“Clearly this remains a challenging environment for any business, or indeed individual, holding pools of capital. The challenges of the current macro-economic environment have been the subject of conference interventions and articles published by The Geneva Association and it is a message that members are also delivering into the heart of governments. It is vital that the implications of these policies are well understood such that they are addressed specifically at the appropriate juncture,” said The Geneva Association in the published survey.

The macro-economic environment was seen as the number one strategic challenge for the industry. Upcoming decisions on insurance regulation came a close second.

When asked about the challenges to their ability to implement strategy, 75% of respondents cited the eurozone crisis as a top concern, with 73% also citing over-regulation and inappropriate regulation.

“The Geneva Association has been working vigorously on the regulatory reactions to the financial crisis and their implications for insurance. Whilst work to delink the insurance process from that of banking was successful, there are worrying signs that regulators may opt for an ideological rather than fact-based regulatory response for insurance. The political pressure for them to be seen to be active and responsive remains significant,” said the think tank on its regulatory concerns.

The CEOs see Solvency II as by far the most serious threat to the insurance industry’s development. 23 of 40 respondents said it would have a ‘very significant’ impact. Financial stability came next with just 10 respondents citing it as likely to have a ‘very significant’ impact.

“Again regulation is a dominant theme and threat when respondents consider the development and outlook for the sector. Here Solvency II stands head and shoulders above other considerations with more than 23 CEOs seeing Solvency II as a very serious challenge to the development of the industry. It is clear from recent EU announcements that attempts are being made to address these concerns. Time will tell whether these outcomes are sufficient to assuage the concerns of our members,” said The Geneva Association.

Insurers’ focus on emerging markets was evidenced by some 70% of the CEOs reporting Asia as a very important region for their firms’ growth and 46% considering South America as ‘highly important’ for growth over the next 12–24 months.

Chairman of The Geneva Association and Chairman of the Board of Management, Munich Re, Dr Nikolaus von Bomhard, said: “The insurance industry plays a vital stabilising role in society and in the world’s economies both as a significant participant in financial markets and as a shock absorber for individuals and companies that suffer an insured loss. The results of this survey reveal that leaders of some of the world’s largest insurers are concerned that inappropriate systemic risk regulation will needlessly affect our ability to play that role.”

John H. Fitzpatrick, Secretary General of The Geneva Association, said, “The insurance industry supports the ongoing regulatory initiatives undertaken by the G-20. We believe that the development and promotion of effective supervisory and regulatory policies to reduce systemic risk and address information gaps is to everyone’s benefit. However, banking and insurance have very different business models and very separate roles in society and the world economy, thus they must be regulated differently. This survey shows that the insurance industry remains very concerned that regulators will opt for a politically motivated regulatory response rather than focusing on a methodology appropriate for insurance.”

The Geneva Association is the international insurance think tank for strategically important insurance and risk management issues. Its membership comprises of Chief Executive Officers (CEOs) from some of the world’s leading insurance and reinsurance companies. The survey was taken on 30 May, 2012.

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