Subjects:

Insurance Law

The Centre for the Study of Financial innovation (CSFI) has recently completed its inaugural Insurance Banana Skins survey of leading members of the insurance industry to find out their concerns about the soundness of the financial markets.

The survey, sponsored by PricewaterhouseCoopers, puts together a league table identifying potential sources of risks to the insurance industry and ranks them by severity. This year’s survey is based on 139 responses in 21 countries.

The poll of top insurance practitioners, brokers, regulators and analysts identified regulatory overkill as the greatest risk facing the industry. More than 100 respondents to the survey said that excessive regulation is endangering the industry by loading companies with costs, distracting management and creating barriers to competition and innovation. The finding was linked to concern about growing political interference, particularly in markets where governments regulate insurance products and prices.

Other high level risked identified by the survey include natural catastrophes and climate change, where insurance losses for property and casualty sector are rising fast, particularly in heavily populated areas. The main risks facing the life insurance industry include growing human longevity and the soundness of assumptions going into the pricing of life policies.