PI Insurance providers fear regulatory change

While the global economic downturn has left many worrying constantly about their financial future, professional indemnity insurance providers actually do not rank a financial catastrophe as their most feared outcome.

The risk that took the top position is something that is possibly related to the market’s current turmoil, however.  The professional liability insurance industry claims instead that the regulatory burdens, that have been placed upon it by both local and international sources, is the true danger.

The recently published 2011 Insurance Banana Skins study, conducted by the Centre for the Study of Financial Innovation, a non-profit organisation based in London, revealed the commercial insurance market’s fears.  Concerns around regulatory changes shot up from fifth place in last year’s Insurance Banana Skins study, but the author of the study made it clear that this was only due to fears regarding the financial crisis’ impact at the time.

The CSFI 2008 survey, which had been undertaken just before the beginning of the worldwide banking crisis, revealed that regulatory change was the top concern of the insurance industry at that time.

CSFI decided on a global sweep for its latest survey, surveying nearly 500 industry observers, regulators, brokers, reinsurers, composite insurers, and life and general insurer executives across 40 different counries.  Survey respondents were asked to select from 26 possible risks during the initial questioning, which occurred in both March 2011 and April 2011.

European respondents dominated the survey at 57 per cent of the total.  The authors of the report noted that this highlights how much of the global insurance business passes through London.  Despite this, the authors also said that many of the respondents that were based in London were from different countries.

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