The European insurance industry will continue to grow this year but at a slower pace than previous years, says accounting and advisory firm Ernst & Young (E&Y).

It says adapting to the changing financial landscape could bring a number of opportunities for European insurers, even with a recession and the 2012 target for three major pieces of regulation.

E&Y’s Head of Insurance in Europe, Lex Van Overmeire, says there are always opportunities in adversity.

“There could be potential rich pickings for those insurers brave enough to use the current climate to implement changes, assess capital adequacy and keep a close eye on the impact of falling investment valuations and incomes,” he said.

The top five considerations for insurers this year are balancing risks and opportunities, rethinking strategies in Central and Eastern Europe, strengthening balance sheets and capital adequacy, readdressing operating issues, and preparing for changes in global regulatory oversight.

E&Y believes certain lines of business are likely to be curtailed as insurers focus on remaining as profitable as possible, with directors’ and officers’, errors and omissions and credit insurance the likely casualties.