The insurance industry should make managing the cycle its top priority, a survey of Lloyd's underwriters suggests.

More than two-thirds of the 138 underwriters questioned in the annual survey believe the industry made insufficient progress on managing the cycle last year, and see the issue as this year's most important.

Other key issues for the industry are containing operating costs and improving efficiency, along with recruiting and developing talent.

While more than half of Lloyd's underwriters believe insurance buyers are giving greater consideration to terrorism and political risk, 56% think more needs to be done to prepare for their impact.

Climate change was also a concern, with a third of those surveyed believing more consideration is being given to the issue but more than half thinking more needs to be done.

Geographically, underwriters believe China offers the most significant opportunities for business growth in specialist insurance, followed by India and the Middle East.

Insurance-buyers need to do more to prepare for the impact of liability risk, 62% of Lloyd's underwriters say, while more than half believe the growth of the "compensation culture" is out of control.

The instability of global financial markets is expected to be the most significant factor impacting the industry this year, followed by changing global dynamics and emerging markets.